Defenses to a Lawsuit by Creditors

Creditors (persons or companies owed money) commonly sue debtors (persons who owe money) as a means of collecting debt.  If you are being sued by a creditor, there are several possible defenses that may be available to you:

Statutes of Limitations

If your debt is old, it may be barred by a statute of limitations.  A statute of limitations is a type of law that prevents parties from suing someone after a certain amount of time has passed.  Whether or not a statute of limitations applies will depend on your state.

This defense may not be available to you if you have acknowledged the debt in writing after the statute of limitations has passed, or if you have paid any portion of the debt after the statute of limitations has passed. 

Usurious Interest Rates

The interest rate applied to your debt may be in excess of limits established by the state.  If this is the case, the interest rate is "usurious".  If a lender charges you an interest rate that is in excess of state limits, they will not be allowed to sue.

Payments Not Credited

If you have made payments to the creditor, and they have not been credited to your account, this is a defense that you will need to bring up in court.  Be sure to have copies of receipts and/or cancelled checks to prove that you have payed.

Defective Property

If the debt arises from property you purchased, and that property was defective, you may be entitled to offset the debt with the cost of the repair.  This defense is especially useful if the seller of the product made representation about the product that were not true, or if the product was not fit for ordinary use. 

Do I Need a Lawyer?

If you are being sued by a creditor, you should contact a lawyer immediately.  A lawyer can help determine whether any defenses are applicable to your case.