• DYE CULIK PC | Consumer Protection Division

3 Common Defenses to Debt Collection Lawsuits

Updated: Jan 22

Did the sheriff serve you with a lawsuit from a debt collector? Each case is different, but there are three major affirmative defenses that consumers consistently use. In this post, we explain what those three defenses are and how they might apply to you.

When a debt collector files a lawsuit in court to collect a credit card or medical debt, the first document you will receive is the “Complaint.” The sheriff usually serves you with the Complaint at your home. You have the right to file what is called an “Answer.” The North Carolina Rules of Civil Procedure are the rules of the game for any lawsuit. Under these rules, your Answer should respond to the Complaint, tell your side of the story, and state the defenses you have.

Not all these defenses apply to everyone, and you should always consult a licensed North Carolina attorney who is experienced with debt-collection defense. That said, there are three most common defenses to a debt-collection lawsuit.

1. The Debt Collector Can’t Prove They Own Your Account.

The debt collector just might not have evidence that it owns your debt. Under the court rules, a lawsuit must be filed by the “real party in interest.” This means that the debt collector must provide admissible evidence to substantiate the allegation that it holds title to your account. Rule 17 of the North Carolina Rules of Civil Procedure requires this.

When debt collectors and debt buyers purchase accounts, they’re sold for pennies on the dollar. They get what they pay for – it is common for the debt collector’s evidence at trial to be insufficient. Under the court rules debt collectors must provide you with all their documentation upon request as part of what is called “discovery.”

What debt collectors usually provide in discovery consists of documents that are incomplete, that do not actually indicate your account was sold, or that may not even reference your particular account. Or, a collector may provide affidavits that basically say “trust us.” None of this is sufficient.

Rather, a debt collector’s evidence must consist of a complete chain of assignments from the original creditor, to any intervening assignees, to the debt collector. Each assignment must state that your specific account was assigned. Under the Doctrine of Completeness, the complete document – not just partial excerpts or unsubstantiated assurances – must be provided.

2. The Debt Isn’t Yours and You Can Prove It.

Even though you aren’t legally obligated to pay a debt that isn’t yours, debt collectors sometimes file collection suits anyway. There are a variety of ways this can happen.

Because debt collectors use computer databases to locate people, they sometimes mix you up with someone who has a similar name or address. The debt collector don’t care. They just file the lawsuit against whoever pops up in the computer.

Or, an identity thief might open an account in your name. Sometimes it’s a hacker, but it’s more likely to be a friend or family member. You are not liable for a fraudulent account, but you will have to file a police report and an identity theft affidavit to clear it up. Most debt collectors don’t believe you unless you take those additional steps.

Another problem is when you get sued despite only being an authorized user (not the cardholder). Most credit cards allow a cardholder to get additional cards for family members without the family member being liable. But when accounts are sold off to collectors, it may not be clear who is liable and who is only an authorized user. Authorized users are not responsible for the cardholder’s debts.

Don’t ignore any lawsuit, even if you think the debt isn’t yours. In most cases you only have 30 days to respond to the Complaint until a court can enter a judgment against you. It is difficult or impossible to reopen a lawsuit after a judgment, even if you weren’t liable for the account. Always respond as required under the North Carolina Rules of Civil Procedure.

3. The Lawsuit is for the Wrong Amount.

It is also common for debt collectors to demand the wrong amount when they file a lawsuit. They purchase accounts in bulk and frequently do not have complete information, often omitting payments or credits that should be applied to the account.

According to one report, the amounts alleged to be owed by one collection law firm were wrong 20% of the time. That means 1 in 5 lawsuits was, in whole or in part, based on a lie.

Another debt collector, Portfolio Recovery Associates, once admitted that they don’t receive information about consumers’ payments made after charge-off because “if no one disputes we get our judgment.” They admit that they have incomplete information, but nobody stops them – so they just keep collecting.

This is a more difficult defense to prove because it requires analyzing the account statements, your own payment records, and calculating the applicable interest. When you can prove that the debt collector made a math error, however, it pays off. Under both the Fair Debt Collection Practices Act and the North Carolina Debt Collection Act, misrepresenting the character or amount of a debt is unlawful and might even entitle you to damages and attorney’s fees.


This post discusses the top three debt collection defenses, but there are many more. Each case is different and the defenses any particular consumer may claim are specific to their own facts. A qualified consumer-protection attorney should review your specific case.

Many consumers ignore debt-collection lawsuits, so debt collectors get automatic judgments against them called “default judgments.” Resist the temptation to stick your head in the sand – champion your rights and use the legal defenses available to you to fight back.

DYE CULIK PC is a consumer financial protection law firm located in Boston, MA and Charlotte, NC. Our attorneys defend against debt-collection lawsuits by debt collectors, debt buyers, and creditors. Our attorneys have represented hundreds of clients in cases involving virtually all major collectors active throughout North Carolina. If you are having debt-collection issues, contact us to see if we can help.