Generally speaking, two different kinds of credit-card related creditors file lawsuits. One type is the “Original Creditor”. As the name suggests, that’s who you borrowed the money from. The second type is a “Debt Buyer”. Again, as the name suggests, this is a business that purchased a debt. How I handle these cases is dependent on which type I’m up against.
Debt Buyers: This type of creditor bought the debt from the original creditor or from another debt buyer. Examples include Midland Funding, Asset Acceptance, Portfolio Recovery Associates, and CACH LLC. To win a lawsuit, they need to prove they own the debt and that the person they sued owes the debt. This can be difficult if they don’t have the right evidence. So, it often makes sense to fight these lawsuits.
Original Creditors: This type of creditor loaned the money they are trying to collect. Examples included Capital One, American Express, Discover, and GE Capital (now Synchrony Bank). To win the lawsuit, they need to prove they own the debt and that the person they sued owes the debt. This is usually fairly easy for the original creditor. So, it doesn’t make financial sense to spend money fighting original creditors. They will usually settle for a percentage of the balance they claim is due. Spend too much fighting the lawsuit and you can quickly get to the point where your attorney fees plus the settlement amount equals more than the full balance the creditor sued you for!