The Best Credit Card Lawsuit Defenses


What in the heck is Standing? Well, it’s the best defense in the world when a junk debt buyer sues you on a credit card case. Standing means that the company that is suing you actually has the right to sue you. Looking at it another way, the debt buyer has to prove that they bought your specific account. This is what gives them the right to sue you, this is what gives them “standing”. Believe it or not, this is an extremely difficult task for a debt buyer to accomplish. When debt buyers purchase delinquent credit card accounts, they purchase thousands of them at a time. The contracts that are entered into to sell these accounts are voluminous, both in terms of how many different contracts there are and in terms of the pages in each document. There is often a general “purchase agreement” between the parties that sets forth the general terms of the sale. Then, there is a “bill of sale” There can be several bills of sale for each purchase agreement. The bill of sale purports to sell certain accounts from buyer to seller. The other document that covers this is called a “forward flow agreement” which also purports to add/subtract terms from the original purchase agreement and which also covers certain accounts. Well, in a nutshell, the debt buyer has to sort through all of this documentation and find your specific account information to establish standing. This is much easier said than done. That being said, debt buyers often do produce “Bills of Sale” for these hearings. Except in very rare occasions, these documents do not ever reference one single defendant, or any defendant. In my eyes, they are useless documents that the court should not ever consider as evidence.

Failure to Prove Damages

In a credit card lawsuit, the Plaintiff is required to prove the amount of the damages. Debt buyers think that means that all they have to produce is the final “charge-off” statement. Frankly, this charge off statement doesn’t prove much of anything. Its a single statement showing that the original creditor believes that some certain amount is due and owing. Is there any chance that the original creditor made a mistake? Certainly, it happens all the time (see recent data breaches) that’s why this single statement isn’t worth much in the eyes of the law. To prove damages, the debt buyers needs to produce all of the monthly statements for the account, or at least that amount of statements that return the balance to zero at some point. That is, they need to go back to some point in time where this account was standing at zero. If they can’t, then their damages, at best, should be limited to the amount that they can show.


I’m going to use hearsay as a general reference defense. We’ve already mentioned elsewhere that these debt buyers buy these accounts AS IS. Well, if the documents are AS IS, meaning that there are no guarantees/warranties as to accuracy or authenticity, then how does the debt buyer get them into evidence in front of the court? Good question… and the only real answer is for them to force a witness from the original creditor to either appear, or to somehow certify that the documents are true, correct and accurate. Good luck with that. Commonwealth Financial vs. Smith is the lead Superior Court case on this subject. We use it all the time. The only problem with this defense is that not all judges (especially the minor judiciary) follow it. Why? I can only assume that its because they don’t understand it. This is another good reason why you need to hire a consumer attorney to defend your case. I, and my consumer law colleagues, can explain Commonwealth vs. Smith and its application to your case much better than you can.

Statute of Limitations

The big one. Everyone knows about the Statute of Limitations… kind of. If a debt collector files a lawsuit against you after the expiration of the Statute of Limitations, you should win your case…if you respond to it properly. In Pennsylvania, the Statute of Limitations for credit card cases is 4 years (in most instances, but in some cases it is 3 years) from the default date. The default date is 30 days after the last real payment that is made on the account.

Why did I mention this defense last? Well, because it doesn’t come up nearly as often as you might think. Sure, we see cases that are filed beyond the SOL every month, but, the majority of our cases are won on one of the other 3 defenses that are listed above. The key to a SOL defense is to raise it. What does that mean? Well, I get calls to my office every week from clients who want to get rid of a judgment because it was SOL. They always say, I knew that it was beyond the SOL so I did nothing. The debt buyer shouldn’t have sued me, so its an invalid judgment. Sorry, but it doesn’t work that way. SOL needs to be raised before the judgment is entered, not after. There is almost never a good reason to ignore a lawsuit. Just because you think it might be filed beyond the SOL is not one of them.

The great thing about the Statute of Limitations defense is that if you are right, you get to sue the debt collector! Yes, you read that right. You get to sue the debt collector for violating the Fair Debt Collection Practices Act. We call this the bonus round. They sued you, but they were wrong, so now you get to sue them. On top of that, your lawsuit against them will cost you ZERO out of pocket. The debt collector will pay us to sue them. Yes, I realize that this sounds to good to be true, but its not. The law says that when they violate debt collection laws, they have to pay your reasonable attorney fees to sue them. So you get to turn the tables on the collector and let them know how it feels to be sued.