While I normally represent banks or businesses attempting to collect a debt for collections, I get random phone calls from people worried about debt collectors, so I wanted to put out some general information to give you some insight on what I see.
First, if you receive a demand letter from a law firm, please take it seriously. With the initial demand letter it is your best opportunity to attempt to resolve a debt. Every day that you wait to resolve a debt increases the interest and attorney’s fees. Most people and companies do not want to file a lawsuit and if you have ignored a demand letter and they have to take that next step, then you have lost an important opportunity to attempt to settle the dispute. Once a lawsuit is filed the plaintiff has paid the attorney a fee to prepare the complaint, the court a filing fee and the process server a fee to serve the lawsuit. That is money that the creditor has paid out of its pocket. This drastically changes the tone of any responses to an offer to settle. If you receive a demand letter do not ignore it. Take that opportunity to resolve the dispute before the lawsuit.
Second, if you are going to fight a claim take steps to preserve and do not destroy any evidence. Evidence can be in the form of emails, texts, phone messages, or letters. Both sides will attempt to use the evidence to support their position. Legitimate defenses may require a review of the terms of the contract between the parties or applicable laws. Unfortunately, most of the defenses that people raise without consulting an attorney, such as “I did not have the money,” are generally not valid defenses. If you entered into a contract with someone, then you have an obligation to fulfill your side of the bargain. If you want to fight a collection action, please consult with an attorney to determine if you have any valid defenses. Valid defenses are unique, and it is a waste of the your time and the courts if you attempt to raise defenses with no basis in the law. A judge will not look favorably if you raise invalid defenses throughout a lawsuit. And the easiest way to lose a lawsuit is to be found to have destroyed evidence. Preserve all evidence, good and bad, and consult with an attorney about your defenses.
Third, while not having money is not a valid defense it is something that the party attempting to collect may take into consideration. It has become more and more common for banks or other creditors in response to a claim that a person has no funds, to request supporting documentation. After receiving financial information a creditor may decide that the person has no assets worth pursuing. In Florida a judgment can serve as a lien for up to twenty years and faced with a person or entity that is currently uncollectable, some creditors will ask a debtor to stipulate to a judgment. This ends the litigation, but can serve as a lien for up to twenty years. While the debtor is not currently collectable, the creditor could wait and in the future garnish wages or bank accounts.
Any collection action is very dependent on the specific facts, so there is not a blanket answer to questions. Please consult with an attorney about your specific dispute. My main point is that you should not ignore demand letters. They provide an opportunity before litigation to resolve disputes and ignoring them loses that possibility.