Receiving a lawsuit for a consumer debt, especially something like a credit card, is alarming. It’s even more frustrating when you know, deep down, that the debt isn’t legitimately yours. Perhaps it’s a clear case of identity theft, a mistaken identity, or even internal fraud by an employee of the original creditor.
In such a moment of confusion and stress, a tempting thought might cross your mind: “Should I just pay it to make it go away?” While this seems like the quickest solution, especially with a time-sensitive court date looming, it’s crucial to understand the significant pros and cons. As consumer protection attorneys in Kansas City and across the Midwest, Bell Law, LLC frequently sees the long-term repercussions of hasty decisions in these situations.
The “Pros” of Paying a Debt That Isn’t Yours (and why they’re often misleading)
- Quick Resolution (Apparent): The immediate relief from the stress of a lawsuit can be powerful. Paying might seem like the fastest way to stop the calls, the letters, and the court process.
- Avoid Court Hassle (Short-Term): You might avoid attending court hearings, filing documents, and engaging in legal discovery, which can seem daunting to those unfamiliar with the legal system.
- Prevent a Default Judgment (Potentially): If you pay the debt, the lawsuit will likely be dismissed, thus preventing a default judgment from being entered against you.
Why these “pros” are deceiving: While you might avoid immediate hassle, paying a fraudulent or mistaken debt often leads to larger, more persistent problems down the road.
The Significant Cons of Paying a Debt That Isn’t Yours
- Validation of Fraud/Error:
- Identity Theft: Paying a debt incurred through identity theft could validate the fraudulent account. It might signal to criminals that your identity can be exploited for financial gain, potentially leading to more fraudulent accounts being opened in your name.
- Mistake/Clerical Error: Paying a debt that’s simply a clerical error or belongs to someone else confirms the inaccuracy. The original mistake isn’t corrected, leaving you vulnerable to similar issues in the future.
- Implied Admission: From a legal standpoint, paying the debt can be seen as an admission that you owed it. This makes it much harder to dispute later if negative marks persist on your credit report.
- Credit Report Damage Persists (or Worsens):
- Reporting Accuracy: Even if you pay a fraudulent debt, the underlying inaccurate information often remains on your credit report. The account might then show as “paid collection” or “paid charge-off,” which are still negative marks.
- Future Impact: These negative marks can significantly lower your credit score, making it harder to secure loans, mortgages, car financing, or even pass background checks for housing and employment in the future.
- Financial Loss: You are paying money for something you genuinely do not owe. This is a direct financial loss that could have been avoided.
- Risk of Judgment Despite Payment/Plan:
- Entering into a payment plan or even making a payment does not automatically mean the lawsuit is dismissed. If you fail to show up in court or have someone legally represent you to ensure the case is properly closed (e.g., through a dismissal or a consent judgment clearly stating terms), the law firm could still take a default judgment against you. This judgment could appear on your credit report and empower them to garnish wages or levy bank accounts, even if you intended to pay or were already on a payment plan.
- No Legal Precedent/Protection:
- By paying, you lose the opportunity to formally challenge the debt in court. This means you don’t establish a legal precedent that this specific debt is not yours.
- You forgo the chance to use consumer protection laws like the Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), or, for Missouri consumers, the Missouri Merchandising Practices Act (MMPA), or for Kansas consumers, the Kansas Consumer Protection Act (KCPA). These laws provide powerful tools to fight back against illegitimate collection attempts and often allow for the recovery of damages and even your attorneys’ fees if violations are proven.
- Encourages Future Abuse: When debt collectors or fraudsters succeed in collecting on illegitimate claims, it reinforces their tactics and makes them more likely to pursue others similarly.
Why Contacting a Lawyer is Crucial (Especially with a Court Date)
If you’ve been sued for a debt that isn’t yours, contacting an attorney is not just an option—it’s often a necessity, particularly given the tight deadlines associated with court dates.
- Time is of the Essence: Lawsuits come with strict deadlines to file an Answer (usually 20-30 days). Missing this deadline can result in a default judgment, which is very difficult to undo. A lawyer can ensure your Answer, including all necessary Affirmative Defenses, is filed correctly and on time.
- Legal Expertise: An experienced consumer protection attorney understands the complexities of debt collection law, including the FDCPA, FCRA, and state-specific consumer protection acts. They know how to identify violations, assess the strength of your defense, and develop a strategy to challenge the plaintiff’s claims.
- Fighting Power: Lawyers can demand proof from the plaintiff that they often lack, identify if you’ve been a victim of identity theft, and if the debt buyer has legal “standing” to sue you. They can also file counterclaims that can potentially lead to financial compensation for you and may even cover your legal fees.
- Protection from Harassment: Once you are represented by an attorney, debt collectors are generally prohibited from contacting you directly, providing significant relief from harassment.
Don’t pay a debt that isn’t yours out of fear or convenience. The long-term consequences to your financial health and peace of mind can far outweigh the short-term relief. If you’ve been sued for a debt you don’t owe, especially here in Kansas City or anywhere in the Midwest, it’s imperative to act quickly and seek legal counsel.
Contact Bell Law, LLC here today for a consultation to understand your rights and fight back.
