What happens at trial in a collection lawsuit?
What happens at trial in a collection lawsuit?
A collection lawsuit trial is simply a trial, but since it can happen in small claims court, district court, or even circuit court, we need to be aware of those differences.
We’ll cover several items:
- What is a trial?
- How formal is the trial?
- What does the debt collector have to prove?
- Also, what should I do since I’ve been sued?
What is a trial in a collection lawsuit?
A trial is where each party has to prove whatever it has the “burden of proof” to prove. Let’s look at a couple of examples.
A debt buyer, say Midland Funding, sues you. Claims you owe $7,000 on an old credit card debt. Midland Funding bears the burden to prove you owe the debt.
And since you never borrowed the money from Midland, it must prove it owns the debt.
Same is true for any affirmative defense you raise, such as the statute of limitations.
Proof comes in two forms — witnesses and documents that meet the rules of evidence.
So here is the typical order of evidence in a small claims or district court trial:
- Plaintiff — the debt collector — puts on evidence and witnesses (including calling you as a witness)
- Defendant — this is you — puts on evidence and witnesses (which may be your own testimony)
- Then the judge makes the decision about who won and who loses.
Here is the typical order of events in a circuit court trial:
- Plaintiff debt buyer makes an opening statement
- You as the defendant make an opening statement
- Plaintiff puts on evidence — witnesses and documents
- You put on evidence — witnesses and documents
- Plaintiff makes closing argument
- You make your closing argument
- Plaintiff gets the last closing argument
- Then the judge decides who won and who lost
How formal is the trial?
Small claims tends to be the most informal. District court is also normally not as formal as circuit court.
Some general rules:
- In most small claims trials, and even most district court trials, you will stand in front of the judge and if you are questioned by the collection lawyer, you will still be standing up in front of the judge.
- In most circuit court cases, you will be sitting in the chair where witnesses sit while you are giving testimony.
- The rules of evidence in small claims court are more relaxed as the judge can hear things that he or she might not be able to hear in district or circuit court.
- In district and circuit court, the formal Alabama Rules of Evidence are used so you need to know these rules or have a lawyer who knows the rules.
Ultimately, you need to go watch your particular judge to see how he or she conducts court as each judge has a certain level of formality. They tend to follow the rules the same, but certainly there is a different feel in each court so that’s why if you are handling the case on your own, you need to go watch a morning or afternoon of trials the week before your actual case so you will know how formal/informal the judge is on these types of cases.
What does the debt collector have to prove at the collection lawsuit trial?
As mentioned above, the debt collector has to prove its case.
It claims you owe money.
And not only owe money, but now owe money to it.
It has to prove both of these or it loses.
If Midland or LVNV or Portfolio or whoever sues you can’t prove you owe the debt, then the collection lawsuit falls apart. So the collector has to prove you owe the $7,000 Chase debt or whatever it has sued you on.
This is where most debt buyers want to stop but its not good enough to prove you owe the $7,000 debt.
You did not borrow money from Asset Acceptance, Cavalry, LVNV, Midland, Portfolio, etc. did you? They never issued you a credit card, right?
So why are they suing you?
They claim you owe the debt to them — so this is something they must prove. Midland or Portfolio or whoever sued you must prove it owns that debt.
So how does it do this?
Witnesses — to prove that it bought the debt. These have to be qualified witnesses who are able to follow the rules of evidence. Not just some random person who says “I know we bought the debt as we would not sue you if we did not buy the debt.”
Documents — if Portfolio bought the debt, then it will have a copy of the contract where it bought the debt, right? You might be surprised as how reluctant these debt buyers are to produce the full contract at trial. The full contract is often called the “purchase agreement”. They may in your case, or they may not, you need to have a plan for either circumstance.
What should I do since I’ve been sued
- File bankruptcy — normally a terrible idea but occasionally it is appropriate
- Fight the lawsuit on your own — can be a good option in small claims or district court if you are willing to spend time
- Settle the lawsuit on your own — normally you are looking at a lump sum of about 50% or more and the account will stay on your credit report
- Hire a lawyer to fight the lawsuit — the objective here is to win as this may allow you to sue the debt collector
- Hire a lawyer to settle the lawsuit — you need to make sure it is a better deal than doing this yourself.
If you have questions about your options when sued in Alabama, which option is best for you in your unique situation, please feel free to get in touch with us by calling us at 205-879-2447 or contacting us through our website AlabamaConsumer.com.
We represent consumers from all parts of Alabama
PS — if you would like to watch one of our more popular videos, we have a 35-minute video on the overview of a case in small claims or district court. This covers from the moment the case is filed, you being served, filing an answer, and going to trial.