Debt collectors threaten consumers with credit card lawsuits for credit card debt they cannot afford to pay. If or when a summons does arrive most consumers do not respond because they know they owe the debt, so they conclude they have no defense and suffer a default judgment.

But now given recent developments, if they do respond and demand the junk debt buyer or even the original credit-card-bank creditor legally document their credit card debt, they will probably make the lawsuit go away.

JP Morgan Chase Co.’s robo-signing problems (see Part I) have American Banker concluding, “With the template for challenging collection procedures already established in the mortgage market, a broad attack on banks’ debt collection practices in other areas of consumer lending could expand rapidly.”

excerpts from the American Banker article . . .

“Banks actually keep pretty crummy records,” says Peter Holland, a University of Maryland law school professor who focuses on consumer debt.

“The person [filing an affidavit] doesn’t have personal knowledge of the records, even though he says he does,” says Charles Debaulm, an attorney for the National Consumer Law Center who has litigated robo-signing involving mortgages and other types of consumer debt. When challenged by a competent consumer defense attorney, “the debt [collection agency] buyer will simply dismiss the suit.”

What has worked in the favor or creditors is the fact that defendants rarely show up in court, enabling creditors to win default judgments in most circumstances. However, when lawyers have put up a defense in such suits, they boast of winning the overwhelming majority of even contested cases.

“Getting judges to focus on the lack of proof in debt buyer cases has taken awhile,” Holland says. “But often the exact same kinds of problems exist in the original creditor cases.”

Rochester County, N.Y. Judge Philip Straniere  found problems extended to Chase’s own collection efforts and dismissed 150 Chase collection cases that relied on dubious affidavits. The documents “appeared to be signed in large numbers by only a few individuals,” the judge wrote in an opinion first cited last year by the Wall Street Journal.

Learn how to defeat debt collectors and collection attorneys.  Read my Credit Card Debt Survival Guide.

List of other related external websites that you may find interesting below. Although I may not agree with all views expressed in the them.

Debt Consolidation -Debt Consolidation Scams
A Credit Card Scam to Avoid - CBS News
AOL.com Search Video - Who Was Hurt Most By Predatory Lending
Re-Liance Inc. - Wikipedia the free encyclopedia
Advance-fee encyclopedia topics | Reference.com