Jurisdiction – Why it Matters in FDCPA and Foreclosure

jurisdiction could mean difference between losing home or not
jurisdiction could mean difference between losing home or not

If someone is trying to take away your house for nonpayment of some debt, the Fair Debt Collection Practices Act (FDCPA) may – or may not – be useful to you. The law differs according to jurisdiction, and you will want to choose the one that gives you your best chance.

This article is a very basic primer on the interaction of state and federal jurisdiction when it comes to debt collection generally, and foreclosure more specifically. Wherever you live, you will want to consider both federal and state cases on applying the FDCPA to foreclosure if you want to sue a debt collector for its acts in taking, or trying to take, away your house.

Most Debtor-Creditor and Property Law is “State” Law

In theory, federal law only applies to areas of the law designated by the constitution, whereas everything else is controlled by state law. That can lead to confusing results where those interests overlap. In general, the laws creating and enforcing property rights (e.g., contract rights, debt, or property ownership rights) are state law. If you get sued for a debt, the action will almost certainly occur in a state (as opposed to federal) court. Foreclosure rights are also determined by state law.

Debt Collection Is a Special Situation

Claims under the FDCPA can be brought in either state or federal court. While property rights are creatures of state law, debt collection was considered so extensive a problem that it was a national (i.e., federal) problem. Thus Congress carved out a piece of debtor-creditor law for itself when it enacted the Fair Debt Collection Practices Act, which makes certain actions taken by debt collectors (primarily) illegal. The FDCPA is federal law, in other words, but as it happens it provides that it can be enforced in either federal or state courts.

Because of the way the federal and state law systems mesh, you could conceivably defend a collection action or foreclosure in state court by filing a counterclaim and seeking an injunction, by filing a separate action in state court under the FDCPA, or by filing a federal claim under the FDCPA and seeking an injunction in federal court. Likewise you could defend or settle a state collection action and then bring suit under the FDCPA in federal court (although remember that the FDCPA has a one-year statute of limitations). All of these variations occur quite often.

States are Independent of Each Other

The state law of the court in which the suit is brought will always determine some the procedures in the case and usually the actual “substantive” rights. Under certain circumstances other state laws might also apply (this comes up most frequently where there is a contract that specifies the state’s law that will apply). State laws and procedures can be different from state to state. If you live in Tennessee, you will be subject to the state laws of Tennessee, and these may (or may not) be very different in some important way than the laws of Pennsylvania, for example, or any other state.

If you are pro se (representing yourself), therefore, your first action must be to determine which state laws (and of which states) apply to which parts of your case at the basic debtor-creditor level. In other words, if you are being sued on a credit card debt, is the company suing you under the law of your home state? Or is it suing you under the laws of some other state? In foreclosure law, it will almost always be suing you (or foreclosing without suit) under the law of your own state.

The courts of one state are not bound in any way by the courts of any other state when they are dealing with their own laws, but they are subject to state courts of appeals and the state supreme courts (and sometimes in certain areas of the law, the U.S. Supreme Court).

State Courts are Independent of Federal Courts, too

Things get a little more complicated when it comes to state courts applying other states’ laws or federal law. In a general sense, they “should” determine what the appropriate court applying its own law would do. In reality, there is usually no appeal to those courts, and so the decisions can vary widely.

The Federal Law

The federal system is similar to the state system, except that eventually they all answer to the Supreme Court. That is, when the Supreme Court has spoken, all the federal courts are supposed to make decisions which are consistent with what the Supreme Court says. Because cases are always decided on the narrowest set of facts possible, and because there are so many laws and cases, however, the Supreme Court often will take many years before deciding a given issue. That leaves the lower courts to guess what the Supreme Court would say. One area where that is happening right now regards whether the FDCPA applies to foreclosure. Eventually the Supreme Court will decide one way or another, but until that time, the lower courts apply the law as they see fit. Sort of.

Each Federal Circuit Controls the District Courts below it

The federal (civil) judicial system is divided into three levels: district courts (where lawsuits are filed and tried); courts of appeal (“circuit courts of appeal”) and the Supreme Court. As described above, all courts answer to the Supreme Court. Below that, the federal circuit courts of appeal control all the district courts below them. Appeals are expensive, specially to the Supreme Court, and they are hard to win. Therefore it is vitally important to win, if at all possible, at the trial court level.

How the Different Jurisdictions Interact

Because the federal circuits are independent of one another, and the states are independent of one another and the federal courts, different places develop different rules arising out of the same law. A perfect example of that would be the way the 3rd, 4th and 9th federal circuits (and all the district courts below them) allow FDCPA claims against foreclosers, whereas the 7th and 11th federal circuits limit those rights. The states also vary from each other and the federal circuits.

Forum Shopping

What all those different decisions mean is that if you are being foreclosed on and think the FDCPA applies to your case, you need to “forum shop.” That is, after determining the state laws that apply to the foreclosure itself, your second task is to determine whether or not your state applies the FDCPA to foreclosure. If not, then does your federal circuit? You will need to look at the law for each and decide where to bring your claim. You can bring it in either federal or state law – you should bring it in the jurisdiction that seems most likely to apply the FDCPA to your foreclosure. Although this isn’t necessarily easy to tell, it can make or break your case, and you need to consider the question as a part of your initial strategy.

About Your Legal Leg Up

Your Legal Leg Up is a business dedicated to helping people fight debt collectors without having to hire expensive lawyers to do it. We offer you everything you need to defend your rights – with special help through our membership services to help make the process smoother, easier, and less worrisome. YourLegalLegUp.com has been in operation since 2007. Before that, Ken Gibert practiced law representing people being sued for debt among other types of consumer law.

If you would like to get a personalized evaluation of your situation, follow this link: https://yourlegallegup.com/pages/evaluation.

For further help, consider our Manuals and Memberships. We have materials on debt negotiations and settlement, forcing debt collectors to leave you alone, credit repair, and many other issues that arise when you are facing debt trouble.

Click here to sign up for our free newsletter, Fightdebt.

Foreclosure: A Debt Collection Method in Ordinary Life

Foreclosure is a form of collection
Foreclosure is collection

Foreclosure in the Real World is Debt Collection

Despite what some courts have held, foreclosure is a form of debt collection in the real world. To put it simply, creditors sell something of yours to pay a debt they claim you owe. This is not, as some legal theory would hold, merely a transference of title back to the “true” owner.

To understand why this is so, you need to know some history and law.

Debt Collectors sometimes threaten to repossess and auction off property that secures a loan unless you pay them, or else they actually repossess and sell off the property, in order to pay the debt. This video and article discuss the way the process works.

What Foreclosure Does

Foreclosure is designed to allow for possession (or repossession) of property that secured an unpaid debt. Most people simply think of foreclosure as “getting kicked out of your house.” And in many situations that is an appropriate understanding. In reality foreclosure addresses ownership rather than possession, however. It involves the termination of at least one person’s  ownership in favor of another person. This can, but does not always, lead to eviction.

English Law and the History of Foreclosure and Property Rights

We don’t think of it often, but one of the great inventions of English law was the division of property into different property “interests” or rights that could co-exist in the same property.

The state “owns” physical property in one way. The landowner owns it in another, and the tenant also has certain ownership rights. If the landowner is married, both spouses will have rights in the property, and it is possible to divide the rights up in many other ways, too.

Another form of coexisting rights is the way you could own your home have it subject to a mortgage and also various sorts of liens.

“Foreclosable” Interests

We are primarily interested in the mortgage and liens because these are subject to “foreclosure.”

Most people (including the courts) only think of “purchase-money mortgages” (the mortgage you take out in order to buy your house) when they analyze foreclosure. But people can place liens on your house in other ways, too.  The state can for taxes or judgments, to name two examples, and there are others.

All liens can be foreclosed. Mechanically what happens is that the foreclosing party causes the property interests to be divided and paid off. The way that is accomplished is by selling the property and splitting the money up according to the priority of interests.

There is a hierarchy of interests. The money goes to pay off the higher interests before the lower interests get anything. Eventually, if there is enough to pay every creditor with money left over, the property “owner” would get that.  Or to put it another way, being the property owner means that you get whatever is left after paying all the other interests off.

You get the “equity.” But usually, if there is not enough to cover all the secured interests, you will owe the secured parties money personally.

Two Examples of Foreclosure

Let’s consider two examples. In the first, Owner A  and B each own houses worth $100,000 on the open market. That’s what they would sell for.

Owner A

Owner A has the following liens against the property: a purchase money mortgage of $35,000, a home equity loan of $10,000, and a mechanic’s lien of $1,000.

$100,000 Value of House

($35,000) Purchase Money Mortgage
($10,000) Home Equity Loan
($ 1,000) Mechanic’s Lien
===================

$54,000 – Equity

Owner B

Owner B has the following liens against the property (in this order – the order of liens is beyond the scope of this article): a purchase-money mortgage of $110,000 (the house is “underwater” because the loan remaining is more than the house is worth); a home-equity loan of $10,000, and a mechanic’s lien of $1,000.

$100,000 Value of House

($110,000) Purchase Money Mortgage
($ 10,000) Home Equity
($ 1,000) Mechanics lien
=============

($21,000) equity (a negative number)

If neither one can pay off the purchase money mortgage, go into default, and someone forecloses, here’s what happens.

Results of Foreclosure

A loses possession of the house, and all security interests in the property are “extinguished.” The money is enough for the mortgage, so the bank takes that. Because the home was security for the home equity loan and mechanic’s liens, the foreclosure breaches the contract with the lender. It intervenes (legally) in the foreclosure and demands its money and gets it before anything goes to A. Because the lien was “subject” to the other agreements, the money goes to pay the lien before A gets anything.

In B’s situation, the bank gets all the money. The other lenders get nothing, but keep their claims against B. The sale extinguishes their security interests in the property, and chances are good they’ll lose everything they  lent.

Why Debt Collectors Often Do Not Foreclose

What if, instead of not paying the bank, A and B had failed to pay the home equity loan? In that situation, the Home Equity lender could foreclose on the loan. Lower level security interests can foreclose on the loan. Any other person with an interest in the property, including the mechanic, might take some action to intervene in order to protect its interests, although in B’s case, especially, this is unlikely. The bank will get all the money, and the home equity lender will get nothing even though it is the one that foreclosed.

This explains why debt collectors rarely foreclose on a house. It will cost them money but get them nothing. But that isn’t to say they couldn’t or that it would never make sense for them to do or threaten to do.

 

Counterclaim When Sued for Debt: Important for Your Defense


Filing a counterclaim is probably the single most important thing you can do in defending yourself from a lawsuit brought by a debt collector. In this article and video, we discuss the importance of filing a counterclaim in general and whether you can do so in your case.

Counterclaim – Why So Important?

In most jurisdictions, which is a fancy way of saying most courts and places, the person bringing the lawsuit is allowed to drop the case  if it want to. And usually at any time it wants to. This isn’t true of federal court, where you have to get permission, but in most state courts it seems to be true. And debt cases are pretty much always brought in state courts.

That means that the debt collector could get tired of you and just dismiss the case at any time.

That’s cool! That’s just what we want and what I’ve been saying you should go for, right?

Yes, but if the debt collector simply dismisses your case, it could also sue you again later. Or it could sell the debt to someone else who would sue you later, and that is definitely not cool! You need the case dismissed “with prejudice” to keep it from coming back. You also need it dismissed with prejudice if you want to repair your credit report.

Counterclaims Give you Some Control

So how do you keep them from dismissing the suit and refiling the suit later? You do this by filing a counterclaim against them. A plaintiff can dismiss its own claim against you, but not your claim against it.

Unless you agree.

If you have a counterclaim, if they want to dismiss the case against you they either have to settle the case with you, or they’re still left defending your counterclaim. They never do that, because then they’d be bound to lose money one way or another. They’d either have to pay you or their lawyers (or both) — without the chance of collecting anything from you. They won’t do that. Instead, they’ll settle the whole case with you.

So a counterclaim gives you power over the plaintiff and lets you keep it around till they agree to destroy the debt (or “extinguish” it, as it is called). A counterclaim means you can put the harassment to an end. And sometimes your counterclaim can be worth a lot more than their lawsuit against you was in the first place.

Who Can File a Counterclaim

Counterclaiming became more complicated in 2017 thanks to an important Supreme Court ruling. Two things are necessary for you to file one: some legal wrong, and a “debt collector.” The legal wrong under the FDCPA is pretty broad and includes fundamental unfairness or deception. But whether the person suing you is a debt collector under the Act is more complicated.

To help figure out whether you have a counterclaim against a debt collector, go here. Who is a Debt Collector after Santander.

 

 

Credit Reporting Act: Repairing Credit after Debt Litigation Part 2

Fair Credit Reporting Act

This is the second part of this article. You can get part 1 by clicking here

You may have heard of the Fair Credit Reporting Act, 15 U.S.C. Sec. 1681. Congress intended this law to limit and reduce the abuses of the credit reporting agencies, which were running roughshod over consumer rights. In particular, credit agencies would report false or disputed information. This damaged people in very real ways – and then the agencies ignored requests to correct that information.

The FCRA was therefore an attempt to assert some kind of control over the process of credit reporting.

I will address this issue in greater detail elsewhere, but the law divides the reporting community into two groups: the agencies and “information suppliers.”

Debt Collectors Are Often Information Suppliers

The people who report debts to the credit reporting agencies are “information suppliers.” While they have a legal duty to report that information truthfully, only the government agencies can enforce that duty initially. In plain English – you can’t sue them just for reporting information falsely. You have to follow some steps.

Your Right against Information Suppliers

Your right against information suppliers is located in 15 U.S.C. Sec. 1681s-2(b). What this part of the law says is that:

1. In general

After receiving notice pursuant to section 1681i(a)(2) of this title of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall –

(A) conduct an investigation with respect to the disputed information;’

(B) review all relevant information provided by the consumer reporting agency pursuant to section 1681i(a)(2) of this title;

(C) report the results of the investigation to the consumer reporting agency; and

(D) If the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis.

Your Rights under the FCRA

What this means in a practical sense is that you should consider following up a debt defense with credit repair. That is, if you win at trial or if you force the debt collector to dismiss “with prejudice,” then you can probably repair your credit, too.

If the debt collector has reported you as owing, or if the original creditor has not reported the debt as sold, then you may want to file a dispute. It is the filing of the dispute that allows you to sue the information supplier for providing false information to the credit reporting agencies.

How it Works

Suppose you go through the litigation process and get the case dismissed with prejudice. Your next move might be to request a credit report from all the credit reporting agencies. Debt collectors do not necessarily provide information to all the agencies, and perhaps they provide different information to different agencies. In any event, get your report from each of them.

When you get the reports, you must read them carefully – do they reflect that the debt was sold? Has the debt collector filed reports saying that you still owe? If the answer to either or both of these questions is “yes,” then you can write to the credit reporting agency requesting that it reinvestigate and stating very specifically that you “dispute” the report and the debt. Don’t be coy about this – you get no points for style here – you need to dispute the report and insist on a correction.

This dispute triggers the responsibility of the credit reporting agency to conduct a reasonable “reinvestigation.” As part of this reinvestigation, the agency must ask the information supplier to investigate the information it is supplying. If the information supplier provides false information at this point, you can sue it under the Fair Credit Reporting Act as well as under “common law” (state law) theories like defamation.

If they claim you owe the money even though they have dismissed the case with prejudice, they would be “estopped” from arguing they were telling the truth if you sued them for defamation or false reports under the FCRA.

Sue the Credit Reporting Agencies?

I’ve never suggested that nonlawyers try to sue the credit reporting agencies. They’re hard to find and serve. It is hard to figure out who is responsible for what at the agencies. And they almost never give up. If you decide to go after the credit reporting agencies, therefore, you should very strongly consider hiring a lawyer.

Credit Reporting Act: Repairing Credit after Debt Litigation Part 1

Life after Debt Litigation

You can use the Credit Reporting Act to clean your credit.

You probably know I am a big believer in filing a counterclaim to a debt lawsuit if possible. Having a counterclaim gives you some very important control over the lawsuit itself. And it also can help prevent other suits or harassment on the debt. If you do not have a counterclaim, the debt collector is free to drop the case at will in most jurisdictions. Your counterclaim prevents this.

There is also another reason relating to your life after litigation: Repairing your credit after the lawsuit.

gotthat.jpg

 

Protect Your Credit Report

You may not know it, but when a creditor or debt collector sells your debt to someone else, it should report that information on your credit report. That way, if the next company also reports you, it is clear that they are doing so on a debt that someone else previously owned. And this in turn prevents one “bad debt” from looking like several bad debts. After charge-off and sale of the debt, the original creditor should not be adding information to your file. That is the right of the next person who obtains the debt. In other words, only the person who currently owns the debt has a right to report information about that debt.

Why is this important?

It’s important because if you force the debt collector to settle a debt as a dismissal “with prejudice,” you terminate the debt collector’s right to collect. You also end its right to report the debt as a debt. That is because it, and any subsequent owner of the debt, is bound by what is known as “res judicata” (or more commonly now called “collateral estoppel”). Basically what that means is that once a court has ruled on the validity of the debt – that ruling will apply no matter who later owns the debt.

Use the Credit Reporting Act

We’ll discuss how you can use the Credit Reporting Act (also called the “Fair Credit Reporting Act) to force debt collectors to remove negative credit references from your record once you’ve beaten them in a debt lawsuit in Part 2 of this article. You can get the rest of this article by clicking here: Using the Credit Reporting Act.

Fair Credit Reporting Act: Your Rights under the FCRA

The Fair Credit Reporting Act establishes certain rules for the credit reporting agencies and outlines your rights against them if they fail. You’ve heard about having rights to a fair credit report. Here, in plain English, is a list and explanation of your most important rights under the Fair Credit Reporting Act.

The Importance of Credit Reports

Our country runs on credit and credit information and the credit reporting behind them. Obviously,  people use credit to purchase things, but as more and more people are finding out, credit reports are used for much more than that. They often impact employment decisions, housing decisions and rates. They also affect business equipment lease rates and insurance availability and price, among other things.

Bad credit has a high price in so many ways.

Credit Reporting Network

As important as all the interests affected by it are, the credit reporting network (the businesses which create and publish your credit information) is a vast and largely faceless bureaucracy. Congress intended the federal Fair Credit Reporting Act (FCRA) to create some accountability in this network. The FCRA was designed to safeguard the accuracy, fairness and privacy of information in the files of consumers held by the reporting agencies.

Different Kinds of Credit Reporting Agencies

There are many different kinds of consumer reporting agencies. Almost everybody knows about the credit bureaus, of course, and there are also “specialty agencies” that sell information about check writing histories, medical records and rental history. The FCRA was directed primarily at these agencies, rather than the creditors or companies with which you normally do business.

Here is a partial list of your major rights under the FCRA.

This isn’t a complete, exact replication of your rights under the Fair Credit Reporting Act. As with most important laws, the exact rights and their limits change as courts interpret the laws. But this will give you an accurate overview – a place to start.

Access to Your Credit Report Limited

A consumer reporting agency may provide information about you only to people with a valid need. These include considering an application with a creditor, insurer, employer, landlord, or other business. The FCRA specifies those with a valid need for the information. And in most cases you must give your consent before they get the information.

Rights When Credit Information Used Against You

Anyone who uses a credit report or another type of consumer report to deny an application for credit, insurance, or employment – or to take other adverse actions against you – must tell you. They also must give you the name, address and phone number of the agency that provided the information. You have a right to a free copy of that report.

Right to Find out What Is in Your File.

You can find out all the information about you in the files of a consumer reporting agency. You must be offered a free disclosure if:

  • A person has taken adverse action against you because of information in your credit report;
  • You place a fraud alert in your file as a victim of identity theft;
  • Your file contains inaccurate information as a result of fraud;
  • certain other reasons.

All consumers will be entitled to one free disclosure every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies.

Right to Dispute and Correct Information

If you identify information in your file that is incomplete or inaccurate and report it to the consumer reporting agency, you have rights. The agency must conduct a “reasonable” investigation, and it must report the information as disputed. If it is unable to verify the information after investigation, the agency must remove or correct the entry.

For practical reasons, this provision may actually provide more important rights against the businesses that report credit events than against the reporting bureaus. Debt collection firms have a hard time providing the required verification.

Time Limits for negative information.

In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old.

Note that is in “most cases.” There are important exceptions to this rule. The exceptions relate to larger transactions. Where a person is seeking a job with a higher salary or insurance with a higher payment amount, the time limit may not apply.

Next Step to Take

Sign up for your free copy of the Fair Credit Reporting Act on this page.

Is Bankruptcy the Best Option when You’re Sued for Debt?

People facing debt lawsuits often panic and look for the quickest, easiest, or least scary way out. And bankruptcy often occurs to them as the solution.

There are often more effective ways to handle old debt, especially credit card or merchant account debt in the hands of a debt collector than bankruptcy. You can defend yourself without hiring a lawyer. Even if that doesn’t work out – which it usually does – you could still file bankruptcy later. But if you can avoid bankruptcy, you will reduce the harm the debt does to you.

Panic is not necessary, and bankruptcy—at least at first–is seldom the best solution in a real-world sense. Here’s why.

 

goodthingsoutofbad.jpg

Two Types of Debt

Debt is divided into two types: “unsecured,” and “secured.” Secured debt means that the debt has specific assets backing it. If you miss payments, you can have your house foreclosed or your car repossessed. These things “secured” the debt and can be repossessed and sold if you stop making payments.

Unsecured Debt

Unsecured debt is debt that is not secured-it isn’t attached to any specific assets. Just because a debt is “unsecured” does not mean that you cannot be sued for the debt. On the contrary, it means you must be sued in person for the debt collector to collect any money. And it cannot repossess the thing. The creditor then “enforces” the judgment against you by garnishing wages or attaching accounts. But this can be difficult for various reasons.

Secured Debt

Lenders on secured debts are in a much better position than those who are not secured. One of those advantages comes in bankruptcy.

In the bankruptcy law, the item securing a debt is really regarded as belonging to the creditor who lent the money if the payment is not made. Specifically, consider a mortgage on a house. The house “secures” the debt, and if you stop making payments the bank can take the house and sell it to pay the debt.

In the bankruptcy law, it is considered unjust to allow someone not paying for the property to keep it from the rightful owner. So the lender typically asks for the bankruptcy “stay” to be “lifted” so that foreclosure can take place. Although this can sometimes be delayed, the courts usually “relieve” the lenders and allow them to foreclose on the house and kick the debtor out.

How Courts Handle Unsecured Debt

With unsecured debt, on the other hand, the debts are simply added up and paid according to how much money the bankrupt person has. Usually very, very little. And only at the end of the bankruptcy procedure.

Bankruptcy May Not Help When It Applies

What all that means practically is that if you have a large secured debt (mortgage) that you cannot pay, bankruptcy will offer you very little protection. If you have a large unsecured debt, bankruptcy will probably protect you, but it is slow, time-consuming and expensive compared to defending yourself against the debt collector.

Some examples may help make it clearer.

Consider the Smiths. The Smiths have a house and make payments of $2,500 per month. Mr. Smith loses his job and they fall behind in their payments. If the family seeks bankruptcy as their house payments add up, the lender will obtain “relief from the stay” and foreclose on the house. The Smiths are out of luck, and bankruptcy usually does not help.

Now consider the Joneses. If the Joneses have credit card debt of $25,000 and Mrs. Jones loses her job so they can’t make payments, they could seek bankruptcy help. It would probably cost them at least a thousand dollars or more to file, require them to disclose most or all of their finances over the past year or two, and fill out a vast amount of paperwork. At the end of the proceeding, at least a year later, their debts would be wiped out. But so, of course, would their credit reports. The bankruptcy filing will remain a mark against them for ten years.

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An Alternative: Defense

The Jones could, however, simply defend themselves against the lawsuits brought by the debt collectors. For reasons I’ve made clear elsewhere, their chances of winning the suit would be excellent, and if the Jones do it right, they can simply get the debt eliminated. This does not usually mean completely cleaning their credit reports, but it can often mean canceling the debt and removal of the recent credit report damage. And it usually will happen in less than six months from the date the debt collector brings suit. They won’t have the bankruptcy on their credit report. They can do it themselves for almost no money at all, and if by chance it doesn’t work, then they could declare bankruptcy.

In addition, if you are facing debt troubles, chances are good the debt collectors have made some mistakes that violate the Fair Debt Collection Practices Act (FDCPA) and give rise to a counterclaim, which increases your chance of fighting the debt.

Conclusion

Better results, less cost. That’s why it’s often better to defend yourself against credit card debt than to seek bankruptcy protection. It’s also true that if for any reason the Jones lost their case against the debt collectors, they could still file for bankruptcy without having lost its protection.