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Defenses to Financing Violations

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What Is Financing?

Financing is a process of borrowing money so that you can afford an expensive object, such as a car or a house. If a lender provides a borrower with financing for a car purchase, this financing is commonly referred to as a car loan, whereas financing for a house purchase is called a home loan.

In most cases, the borrower will be bound to certain terms and repayment schedules by a contract. The lender will usually charge interest and may charge a fee for the financing services.

What Are Some Financing Violations?

Financing arrangements are useful, but they can also involve certain types of violations. These include:

  • Loan fraud
  • Misrepresentation in a contract
  • Violation of state or federal guidelines (for instance, regarding collection methods, interest rate changes, etc.)
  • Forcing a person to sign a financing agreement
  • Lying to a government officer or agent regarding an agreement
  • Various other violations

These types of violations can occur in an individual person’s arrangement, or they can also occur as widespread violations in a business organization. Thus, many financing violations require major investigations by the proper authorities.

What Are Some Defenses to Financing Violations?

Depending on the laws in each state, as well as the facts in each situation, there may be a number of defenses to financing violations. Some of these include:

  • Unclean hands: In some cases, the plaintiff may be prevented from receiving certain remedies if they are guilty of the same violation that they are filing suit for.
  • Lack of knowledge: Many violations require that the defendant acted intentionally and with knowledge that they are deceiving a party. Therefore, lack of knowledge can serve as a defense in some cases.
  • Coercion: It may be a defense if the defendant was forced to engage in the violation by another party.

Many other defenses may apply as well, such as intoxication, especially involuntary intoxication, or lack of intent. These may depend on the way that each specific jurisdiction interprets finance laws.

Do I Need a Lawyer for Help Defending Against a Financing Violation?

Financing violations can sometimes lead to very serious civil and criminal penalties. You may need to hire a lawyer if you need help with financing matters. A qualified lawyer in your area can provide you with legal representation and advice to help you with your claim. Also, if you have any specific questions regarding defense arguments, your lawyer can provide you with in-depth legal research and guidance.

Photo of page author Jose Rivera

, LegalMatch Legal Writer

Last Modified: 06-04-2014 03:30 PM PDT

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