Collection lawsuit basics

Debt collection lawsuit in Minnesota? What you need to know.

Dealing with a debt collection lawsuit can be a scary and confusing process. This is especially true in Minnesota where the initial stages of the case often take place outside of court oversight. Hopefully, this post will shed some light on the collection litigation process and allow you to make a more informed decision about how to get your case resolved as quickly and painlessly as possible.

Before we begin...

This post describes the basic steps of a debt collection lawsuit in District Court in Minnesota. Every state has different laws and procedures. What happens in a Minnesota lawsuit may be very different from what happens in a collection lawsuit in another state. If your collection lawsuit is not in Minnesota, then you shouldn't rely on anything I've written here. And if your case is in Minnesota Conciliation Court, or small claims court, then the steps are different than what I've described here.

Step 1 -- Service of the Complaint

In Minnesota, a debt collection lawsuit begins when the consumer is served with the Summons and Complaint. The Summons is a notice that a lawsuit has started and contains basic instructions about what to do next. The Complaint details what claims are being made. The Summons and Complaint are not required to be filed with a court and most debt collection lawsuits will not be filed at the time they are served. Accordingly, the Summons and Complaint will not have a court file number on them. There is a lot of information on the internet that suggests that a Complaint without a file number is invalid. This may be true in other states, but it isn't true in Minnesota.

I'm often asked what it means to be "served." Served essentially means "notified." In Minnesota, the most common way to serve a defendant with a Summons and Complaint is to personally hand it to the defendant. Another common method of service is to hand the Summons and Complaint to a person of "suitable age and discretion" that lives with the defendant. This is usually a spouse, older child, or roommate. In Minnesota, it's possible to serve a Summons and Complaint by mail, but the defendant must sign an acknowledgment that they've received the complaint or it's not effective service. It's also possible to serve a defendant by publishing notice of the lawsuit in a newspaper or similar publication, but this is very rare in debt collection lawsuits.

Step 2 -- Answer the Complaint

Once a debt collection lawsuit is served, the defendant has 20 days to respond with an Answer. An Answer is a formal, written, legal document that specifically responds to each of the allegations in the Complaint and lists any defenses that the defendant has. Phone calls or letters are not considered Answers under the court rules.

If the defendant does not answer a lawsuit within 20 days of being served, then he is in default and a judgment may be entered against him. In a debt collection lawsuit, a default judgment is a final court order that the consumer owes the money. If a default judgment is entered, none of the steps below will take place and the case will be over. A default judgment is granted not because the creditor has better evidence or arguments, but because the consumer didn't participate. It happens administratively and no judge will ever see the case. If you want to protect your rights and force the creditor to prove its case in front of a judge, then you must answer the lawsuit within 20 days of being served. This is especially important if you've been sued by a debt buyer.

Step 3 -- Initial disclosures and discovery plan

After the Answer is served, the parties are required to confer about the case and develop a plan for discovery (Step 4, below). This conference, which can be by phone, is required to take place within 30 days of the original due date for the Answer. Most debt collection law firms will send a letter to set up the conference.

The parties are also required  to disclose all known witnesses and supporting documents, as well as to itemize the claimed damages and describe any insurance coverage for the claims, at this stage of the case. These are known as Rule 26 initial disclosures and must be sent to the other side within 60 days of the original due date for the Answer.

Both the initial disclosures and discovery conference and plan were added to the court rules in 2013.

Step 4 -- Discovery

Once the discovery conference takes place , the next step in a debt collection lawsuit is discovery. If the case has not been filed with the court, there is no explicit time frame for discovery to happen and the parties are free to serve discovery whenever they wish. Once the case is filed with the court, the court will issue a deadline for discovery to be completed by.

Discovery is simply an opportunity for the parties to exchange information about the claims and defenses involved in a case. Discovery is not compulsory and a party is only required to provide information if they're properly asked. The most common forms of discovery in a debt collection case are Interrogatories, Request for Production of Documents, and Requests for Admission. Interrogatories are basically just questions that one party asks of the other. Requests for Production of Documents, as the name implies, requires that certain documents related to the case be produced. And Requests for Admission are essentially true or false questions about the claims or defenses in the case.

To request discovery, a party has to properly serve their Interrogatories, Requests for Production of Documents, or Requests for Admission. Written discovery is usually served by mailing the requests to the other side. The other party then has 30 days from the day the discovery was served to respond fully. Simply mailing a letter to the other side asking them to provide information about the case is not sufficient and doesn't trigger the other side's duty to respond.

Requests for Admission are probably the most critical part of discovery, because if they are not responded to within 30 days, they are considered admitted. Creditors write their Requests for Admission carefully so that if the consumer doesn't respond to them, they will end up admitting each element of the creditor's claims. I've seen cases where the only evidence that the creditor put in front of the judge was the consumer's failure to respond to the Requests for Admission.

The bottom line: if you receive discovery requests, you must truthfully respond to them in writing within 30 days. If you don't, you risk losing your case on a technicality and being penalized by the court. And if you want to ask questions of the other side and see what documents they have, you must mail them proper discovery requests. If they don't respond within 30 days, you can ask a court to make them respond and penalize them if they don't.

Step 5 -- Filing the case with the court

In 2013, the court rules were changed to require that cases be filed with the court and brought under court supervision within one year from the date the Complaint was served. If the case isn't filed within the one-year time limit, it is automatically dismissed with prejudice and can't be re-started. The rules allow the parties to agree to extend this deadline, but there rarely is a reason for a defendant in a debt collection lawsuit to agree to extend this deadline.

To file the case, each party must file their initial pleading (ie. the Complaint or the Answer) and pay the court filing fee, which is about $325. The parties also have to file their discovery plan from Step 3 above. Once the case is filed, it will typically be assigned to a judge and the court will issue a schedule with deadlines for the case.

Step 6 -- Summary Judgment Motion

The next step in the majority of debt collection lawsuits is the creditor's summary judgment motion. This is a hearing in front of a judge where the creditor will offer all of its evidence and legal arguments and ask the judge to give them a judgment. Defending a summary judgment motion is a complicated and involved process, but essentially it requires the consumer to file a brief with his legal arguments, any written testimony that he wishes the court to consider, and any documents that he wants the court to review. There is a hearing where the judge will have an opportunity to ask questions of both sides. The judge then considers all of the arguments and evidence and decides whether the creditor is entitled to a judgment. If the judge rules in favor of the creditor, a judgment is entered and the case is over. If the judge rules against the creditor, then the case will proceed to trial.

Defending against a creditor's summary judgment motion is probably the most difficult thing for a consumer to do himself. There are a myriad of rules, procedures, and deadlines that must be strictly followed. Many summary judgment motions are won by the creditor on a technicality rather than on the merits. For this reason, a consumer faced with a summary judgment motion should strongly consider hiring an attorney. If you want to hire an attorney to help you at this point, you should hire one immediately after getting notice of the creditor's summary judgment motion. There are strict deadlines to file your response and an attorney will need as much time as possible to get up to speed. Don't wait until the week before the hearing to call an attorney.

Step 7 -- Mediation

In most cases, the court requires the parties to engage in mediation. Mediation involves a neutral third-party, sometimes a retired judge, that tries to help the parties resolve their differences and settle the case. The parties usually have to bear the cost of hiring a mediator, although more and more courts are offering low-cost mediation for qualifying cases and parties. The mediator can't require you to settle the case, but they can help you see the benefits of settlement and propose different settlement options.

Step 8 -- Pre-Trial and Trial

If you're fortunate enough to defeat the creditor's summary judgment motion and the parties don't settle at mediation, the next step in a debt collection lawsuit will be a trial. The judge will issue detailed instructions about the time leading up to trial. There are so many variables at this point that it's difficult to describe all the potential scenarios. If you get to this point, you would benefit greatly from discussing your case with an attorney. You have a great deal of leverage to get the case resolved if you defeat the summary judgment motion and an experienced consumer attorney can help you maximize that leverage to get the best possible outcome.

Settling a debt collection lawsuit

At any point during a debt collection lawsuit, the parties may agree to settle the case. Usually, this means that the consumer will pay an agreed-upon amount of money and, in exchange, the creditor will dismiss the lawsuit. The amount of money that the creditor will agree to settle for depends on many factors, but generally speaking, the better your legal defenses, the better deal you can get. A document financial hardship can also help facilitate a manageable settlement. Here are some tips for getting the best deal possible.

A final word -- the Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is a federal law that regulates what debt collectors can and can't do when collecting debts. The FDCPA applies even if you owe the debt. If you're involved in a debt collection lawsuit, you should to educate yourself about the FDCPA. This post is a good place to start. Basically, a debt collector can't harass you, lie to you, or use any unfair collection tactics. If a debt collector violates the FDCPA, you can sue it for up to $1,000, plus any actual damages. The debt collector also has to pay your attorney fees and costs if you win your FDCPA case. A FDCPA claim can often be brought as a counterclaim in a debt collection lawsuit, which often will give you additional leverage to get the suit resolved.

Changes to Minnesota court rules affect debt collection lawsuits

On July 1, 2013, some pretty significant changes to the Minnesota Rules of Civil Procedure went into effect. The amendments deal primarily with the initial stages of litigation and could have a big impact on debt collection lawsuits here in Minnesota. The full text of the amendments can be found here.

Cases must be filed within one year of commencement

The new rules require that all civil cases served after July 1, 2013 must be filed with the court within one year of the date of service. Under the old rules, there was no deadline for filing the case with the court. Now the plaintiff must file the case within a year of serving it or it will be dismissed with no opportunity to refile.

I’m sure that the debt collection law firms have put procedures in place to ensure that all cases get filed within a year, but it wouldn’t surprise me if some cases fall through the cracks and don’t get filed. This would be a huge win for a consumer, because if the case is dismissed with prejudice (meaning no right to refile), it can never be brought again.

Mandatory initial discovery disclosures

Another big change involves the way that the early stages of the case proceed. Under the new rules, the parties must make mandatory discovery disclosures within 60 days of the initial due date of the answer. The new rule requires the parties to disclose (1) the name of all persons with discoverable knowledge in the case, (2) a copy of the documents that relate to the case, and (3) the plaintiff must provide an itemization of damages.

I’m interested to see how the debt collection attorneys respond to this rule. Typically, they don’t have access to any documents from their client at the early stage of the case. I think they could comply with the new rule by disclosing what they have and updating later when they receive more documents. I had initially hoped that the this new rule would eliminate the need for extensive discovery later in the case, but that will only happen if debt collection attorneys take the spirit of the new rule seriously.

Mandatory early discovery conference

The parties are required to meet and confer within 30 days of the initial due date of the answer. The purpose of the meeting is to discuss the discovery phase of the case and to prepare a written report to the court that contains the parties’ discovery recommendations. Under the old rules, no such meeting or report was required.

This discovery conference is unnecessary in most consumer debt collection cases. There are rarely discovery issues to be discussed and discovery disputes are pretty rare. I think it’s a good idea in other types of cases, but in debt collection cases it'll only add to the cost of litigation without offering any meaningful benefit.

Optional court discovery conference

In addition to the mandatory discovery conference between the parties, the new rules give the court the option of having an early discovery conference with the judge.

I suspect that most judges will forego this conference in debt collection cases, but I could see some judges using it as an opportunity to get the parties together and urge them to settle.

Why doesn't this collection summons have a case number?

Many of our clients get papers that appear to be a collection summons, but don't realize that it's real because there's no case number. Minnesota has some unique rules about how a debt collection lawsuit is started, and these rules tend to trip people up. Here's what you need to know:

Why don't these papers have a case number?

In most other states, debt collectors have to file a case with the court before they can serve papers on the defendant. Minnesota state courts, on the other hand, have pocket filing. Pocket filing (also called pocket service) means that a collection summons can be served on a defendant without being filed with the court. The case will have to be filed with the court eventually, but not to start a case. No case number is assigned until the case is filed.

Don't ignore a collection summons that doesn't have case number

Just because there's no case number, it doesn't mean that the normal deadlines for a lawsuit don't apply. When you' receive a summons and complaint, case number or not, you have 20 days to respond. You do this by sending an answer directly to the plaintiff's lawyer in the case (the debt collector's law firm) rather than responding to the court.

There are serious consequences if you don't respond

If you don't respond to a pocket-filed lawsuit in time, the debt collector can get a default judgment against you--meaning that they win their case and they can try to collect the judgment. Debt buyers, in particular, get a lot of default judgments based on the failure to respond. Many people come to see us who are having their bank accounts levied or their wages garnished and they can't figure out why, since they didn't realize they were being sued in the first place.

If you've received legal papers, consider contacting a consumer rights attorney right away. 20 days to answer a lawsuit goes by very quickly, and an attorney can advise you of your options before a debt collector can get a judgment.

How to respond to a debt collector's requests for admission

A favorite litigation tactic used by collection lawyers in a debt collection lawsuit is to serve an unsuspecting consumer with requests for admission. These are typically a series of statements that you are asked to admit or deny. In other forms of litigation, requests for admission are typically used to figure out what facts are disputed in the case. But debt collectors don't use requests for admission to learn more about what facts you dispute. In fact, they could probably care less about your answers and would prefer that you didn't answer them at all. Why? Because if you don't answer the requests for admission within 30 days, every statement in them is then considered to be true. So debt collectors structure them in a way that if you don't answer, you've admitted each element of their case. And debt collectors are well-aware that the majority of people will not answer the admissions because they don't understand the serious consequences of not doing so.

This is just another example of debt collectors using a court rule for something other than its intended purpose. I've seen debt collectors ask judges to rule in their favor based only on the consumer's failure to respond to the requests for admission. They didn't produce any billing statements, applications, terms and conditions--any evidence. And though I suspect that most judges know exactly what the debt collector is up to, their hands are tied to a certain degree by the court rules.

So the lesson here is to respond to every request for admission within 30 days. You only have to admit the statement if you know for a fact that its true. For example, if the statement asks you to admit having a credit card with a specific 16-digit account number, unless you know for sure that is your account number, you can probably deny the request. Of course, if you have copies of your billing statements with that account number on them, you'll probably have to admit that request.

What is a deficiency judgment?

A deficiency judgment is a legal judgment that can result after a foreclosure. A deficiency is the amount of the mortgage that isn't satisfied by the sale price of the home in foreclosure. Here's an example: First Mortgage = $100,000

Second Mortgage = $50,000

Property sells at Sheriff’s Sale for $90,000.

In a typical foreclosure by advertisement, even though the holder of the First Mortgage lost $10,000, it can't go after the homeowner any of the money it lost.

The holder of the Second Mortgage can go after the homeowner for the full $50,000 as a deficiency judgment.

I was sued by Messerli & Kramer. What can I do?

Messerli & Kramer is the biggest debt collection law firm in Minnesota. They're very effective at what they do, and if you're up against this 800-pound gorilla of the debt collection world, you'll want to be prepared. Messerli & Kramer can be a very tough opponent.

Make sure to respond to a collection lawsuit right away

Once you've received legal papers, you generally have 20 days to answer. If you don't answer on time, Messerli & Kramer can get a default judgment against you. Also, you may have defenses against a debt collection lawsuit, especially if the lawsuit is on behalf of a debt buyer. Most consumer lawyers will give you a free consultation to discuss your defenses if you've been sued.

Know your rights

Messerli & Kramer is not only a law firm, but also a debt collector. They're regulated under the Fair Debt Collection Practices Act (FDCPA), a law designed to protect you from abusive debt collection practices. If you've been harassed by a debt collector, get in touch with an attorney immediately.

Don't make an agreement to pay without getting it in writing

This isn't just for Messerli & Kramer--it's for any law firm or debt collector. Before you agree to settle a debt, you want written proof of the terms of the agreement. You want to know the amount of the monthly payments and the number of payments it'll take pay off the debt. If they're still charging an interest rate, you'll want to know about that too. At the very least, you'll want the agreement in writing so that you understand your own obligations so that you don't slip up.

We can stop lawsuits through bankruptcy

Filing bankruptcy will stop any debt collection lawsuit. If the debt you're fighting is large, or if this is just one of many debts you have to deal with, a bankruptcy attorney can help.

Any John Doe Will Do

One of the more shocking things we're seeing lots of lately are consumer collection lawsuits against the wrong party. What I'm talking about specifically are suits against a person who has the same name as a debtor - suing Blake Iverson of Minneapolis when the debtor is Blake Iverson of Burnsville (by the way, I think that dude has been checking out library books on my account). We've seen a couple variations on this.  The first easier to see as a mistake. David Friedman Sr. is an upstanding citizen.  Now that the kids are out of the house, he and his wife have moved to their dream home in Little Canada. David Friedman Jr. has never lived at the current home of his parents. He lives in a van down by the river and hasn't paid the Culligan man since 2006. Culligan sues David Friedman and serves the gardener at the Friedman estate in Little Canada. When no one responds, they get a default judgment and record it against the WRONG David Friedman.  David Friedman Sr. doesn't discover this until he applies for a car loan to buy a new Ferrari.  He is rejected for the loan and humiliated in front of his banker.  The conceivable excuse here is that Jr. and Sr. may have had the same phone number in the past (remember family home phones?) and a records search linked the number Jr. had used to Sr.'s current address.

There is no excuse for the other variety.  This is where a debt collector's attorney files suit against a party with no relation to the debtor, but who shares his name.  This may be mere sloppiness - not checking social security numbers or address histories, but it may be more nefarious.  We've seen several instances of this from immigrant communities, where folks may not be native English speakers and might be more susceptible to bullying from lawyers.

The Kafkaesque problem facing people who are wrongly sued is that the debt collection attorneys are very stubborn and often unwilling to vacate these judgments, even when proof is offered. For this reason, consider contacting a consumer attorney if faced with this issue.

Fighting debt collectors vs. filing bankruptcy

We make a point of not selling any particular service to our clients. We're here to listen to your story and then lay out the different options you may have. Often, consumers call us when they've been sued by a creditor. Getting sued is a scary thing and the person sitting across the table from us is often nervous and upset.  We do our best to take fear out of the equation and get focused on reaching a resolution. In a situation like this, we generally start with a few questions, like:

-Do you actually owe the debt claimed in the lawsuit?

-Does the amount demanded in the suit seem like approximately what you thought you owed to this creditor?

-Who is suing you (original creditor or debt buyer)?

We'll then turn to a more holistic discussion of your situation. In order to set forth your options we will need to learn about your work situation, your monthly obligations, your assets and your other debts (are you at a point where other creditors may sue you?). We will also ask about your future plans. If you're planning to buy a house or a new car in the near future and will require the ability to get new credit, that will impact the way you deal with the suit.

In any case, your unique situation will determine what options are open to you, but the two most common remedies our clients choose are defending/settling the lawsuit or filing bankruptcy.

Defending a lawsuit: If you are interested in defending the lawsuit, we will determine what defenses and potential counterclaims you have. Sometimes we can develop counterclaims that really turn the table on the creditors. We will let you know if we think your case has that potential and give you our opinion on the strengths and weaknesses of the creditor's claims. We can also discuss whether it makes the most sense for you to litigate the case or try to settle it.

Bankruptcy: You can find more detailed information on the bankruptcy process here.

If you are facing suits from multiple creditors we can discuss whether a bankruptcy, either Chapter 7 or Chapter 13, makes more sense than fighting a series of lawsuits. In terms of legal fees, it costs about the same to hire us to file a Chapter 7 bankruptcy as it does for us to defend one debt collection suit. Of course there are ramifications either way, but rest assured that we'll discuss them at length with you and help you make the best decision.

What is a summary judgment motion?

A summary judgment is a final decision by the court without having a trial. Debt collection lawsuits rarely go to trial and most are decided on a motion for summary judgment. The purpose of a trial is to resolve the facts that are disputed. In other words, the jury (or judge in a court trial) listens to all the witnesses's testimony, reviews any exhibits, and decides whose story is more believable. When someone brings a summary judgment motion, they're arguing that all the important facts are undisputed--so there's no need for a jury to hear testimony--and that the judge should just apply the law and make a decision. In debt collection cases, the creditor usually brings the summary judgment motion. Occasionally, it makes sense for the consumer to bring their own motion, especially in a debt buyer lawsuit where the debt buyer doesn't have sufficient evidence.

So what should you do if the debt collection lawyer brings a summary judgment motion in your case? First, you need to figure out if there are any facts that are disputed. If there are, the judge must deny the summary judgment motion and schedule the case for trial to resolve those disputed facts. If you come up with some, you'll need to put them in your response to the creditor's motion. In Minnesota, a response to a summary judgment motion must be filed with the court--and sent to the creditor's attorney--at least 9 days before the hearing. Additional time is necessary if you are going to mail your response. If you don't file a written response, you'll probably lose the case and the judge might not allow you to make any oral arguments at the hearing.

A summary judgment motion is probably the most difficult phase of a debt collection lawsuit for a non-lawyer to handle. You should strongly consider talking to a lawyer with experience defending debt collection lawsuits.

What is a summons and complaint in a collection lawsuit?

The summons and complaint are the legal papers that start a debt collection lawsuit.  The summons notifies you that a lawsuit is starting and to lets you know how long you have to respond to it. The complaint is the actual lawsuit that has the claims and allegations. In Minnesota, the summons and complaint will usually not have a court file number. Don't be fooled by this. Due to Minnesota's unique pocket-filing rules, you still must answer the lawsuit within 20 days of being served. If you don't, a default judgment will be entered against you and the debt collection will have the power to garnish your bank account and wages. While it's important to respond to any summons and complaint within the required time, it's particularly important to respond to a debt buyer lawsuit.

Before 2013, the summons was filled with legalese and was very difficult to understand. Thankfully, it's been updated and most of the legal lingo has been taken out. The current summons form does a pretty good job of advising the recipient of their rights and obligations. If you receive a summons and complaint, be sure to read it carefully. You should also consider talking to a lawyer with experience in defending debt collection lawsuits to help you evaluate the claims and your options.

What is an Order for Disclosure?

In Minnesota, when a creditor obtains a judgment, they can request that the court send you a form called an Order for Disclosure or OFD. The form asks you where you work, how much you make, where you bank, and other questions about your assets. The idea is to allow the creditor to discover what assets you have available that may allow you to pay the judgment.

But here is the critical part:  you MUST fill out the OFD and return it to the creditor within 10 days. If you don't, then the creditor can go to a judge and ask the judge to issue a bench warrant for your arrest for failing to fill out and return the OFD.  That's right, they can haul you to jail for not filling out a form. So if you get an Order for Disclosure in the mail, make sure you truthfully fill it out and return it. Not every debt collector will seek a bench warrant for failure to return an OFD, but some will and you don't want to spend time in jail just for failing to fill out a form.

Can a debt collector serve me with a lawsuit by mail?

I've been asked several times recently whether a debt collector can serve someone with a lawsuit by mail. In Minnesota, the answer is yes, but only if you sign a form acknowledging receipt of the lawsuit. Merely mailing you a lawsuit is not valid service. If you don't sign and return the acknowledgment, there is no service and you are under no obligation to respond to the lawsuit. Apparently, some debt collectors are mailing lawsuits to consumers as a collection tactic. I imagine the belief is that the consumer will believe they have been served with the lawsuit and, out of fear, immediately call up the debt collector to make payment. If that is, in fact, the intent, I believe the approach is misleading. And depending on how the debt collector's cover letter is worded, this tactic may be a violation of the Fair Debt Collection Practices Act (FDCPA).

If you receive a debt collection lawsuit in the mail, only sign and return the acknowledgment if you intend to answer the lawsuit within 20 days of the date you sign the acknowledgment. If you sign and return the acknowledgment, but don't answer the lawsuit, a default judgment will probably be entered against you.

How to answer interrogatories in a debt collection lawsuit

In the past, I've written about the importance of answering a debt collection lawsuit. But answering the lawsuit is only the first step. After the debt collector receives your answer, they'll usually send you written discovery. The discovery will probably have interrogatories, requests for production of documents, and requests for admission. In Minnesota, it's critical that you respond to each of these things within 30 days of receiving them. I'll talk about each of them separately, starting with the interrogatories. Interrogatories are simply just questions about the case. Debt collectors are allowed to ask about anything that is relevant to their claims or your defenses. Do your best to answer each question. If you don't understand what the interrogatory is asking, then you may answer that you object to the interrogatory as vague or ambiguous. Like requests for admission, your answers to each interrogatory are due within 30 days. Unlike requests for admission, it's not fatal to your case if you don't answer within this time. But you should make every effort to answer within 30 days and you should never just ignore the interrogatories.

Requests for admission are usually short, true/false statements. You're required to either admit or deny each statement. If the statement is completely true, you have to admit it. If any part of the statement is false, you should deny it. If you don't have enough information to admit or deny the statement, then you should deny it. For example, if the request asks you to admit to owing a very specific sum of money and you're not sure if that amount is accurate, then you should deny the request. If the request asks you to admit that a certain debt buyer purchased your account from the original creditor and you can't be sure that they have (and you almost never can), you should deny the request. Most importantly, it's critical to respond to the requests for admission within 30 days. If you don't answer them within this time, the court will treat each question as if you admitted it. Debt collectors sneakily structure their requests for admission to contain statements about each element of their case. That way if you fail to respond to them, they'll have proven their case in its entirety. You don't want to give the debt collector this free pass. Make sure you answer the requests for admission within the 30 days and force them to produce actual proof of their case.

Requests for production of documents allow the debt collector to determine what, if any, documents you have to support your defenses. Again, your responses are due within 30 days. You only have to produce documents that are in your possession. If you don't have the document, you don't have to produce it. In fact, in most debt collection lawsuits, the consumer doesn't have any documents that they can respond with. But if you have what the debt collector is asking for, you must send them a copy of it. Like interrogatories, there is no fatal penalty for failing to answer the requests for production of documents within 30 days, but you should make every effort to do so and you should never ignore requests for production of documents. Once you've answered all three types of discovery, you should send a copy of your answers to the debt collector's attorney. Make sure to keep a copy for yourself.

A final word of caution: there are many forms available online that seemingly can be used to answer debt collection discovery. But before you just copy and paste from the internet, make sure you understand what the form answers mean and whether they apply to the discovery requests for your case. And be careful with objections. Unless you understand what an objection means and are relatively sure it applies to the question you've been asked, it's probably best to just answer the question.

Debt settlement companies: consumers beware

They go by many different names: debt settlement companies, credit counseling agencies, debt negotiators, etc. Many consumers turn to them when their bills started piling up. They pay the company several thousand dollars as an up-front fee. The company promises to get them out of debt through a "secret program" that the credit card company doesn't want them to know about. But what the debt settlement companies don't tell consumers is that there really are no secret programs to get out of debt. I know this because I used to collect debts for some of the largest credit card companies in the world. And even though the credit counseling agency promises to settle your debt for pennies on the dollar, remember that it takes two parties to settle a debt, the consumer and the creditor. And creditors rarely settle debts for pennies on the dollar. So now the consumer is in the same position as they were before hiring the debt settlement company, only their wallet is noticeably lighter.

Consumers would be wise to avoid for-profit debt settlement companies. Many are outright scams that will pocket your money and then disappear.  And even the legitimate ones can't do anything that you can't do yourself for free. But if the thought of negotiating with your creditors makes you nervous, there are many non-profit programs that do fabulous work for no fee.