Turning the Tables: 5 Ways a Debtor Can Recover Attorney’s Fees in a Collection Lawsuit

Dice on a backgammon board close-upIn many cases, the scariest part of litigation isn’t the threat of paying a judgment if you lose; it’s the certainty of paying attorney’s fees and litigation costs, win or lose. This prices most normal people out of litigation, and often drives people and small businesses to settle lawsuits even when they are likely to win on the merits.

For this reason, many consumer-protection laws allow successful consumers to recover their attorney’s fees.

That’s all well and good when the consumer is the plaintiff–when they are bringing a lawsuit against an unscrupulous bank or business–but what about a debtor who is inappropriately sued in a collections action?

The National Consumer Law Center suggests a few ways that, with a little creativity, a successful Virginia debtor can recover some or all of his attorney’s fees through the following mechanisms:

  1. Rando statutes. Although Virginia law is overwhelmingly business-friendly, you can still find some helpful consumer protections scattered throughout the Virginia Code. For example, Code § 6.2-427 says that ” In any suit arising out of the use of a credit card, where the request, consent, or use as required by § 6.2-425 is denied and is not proved, and judgment shall be for the defendant, the court shall assess against the issuer all court costs and shall award the defendant a reasonable attorney fee.” Who knew?
  2. The contract. Most credit-card agreements are (predictably) one-sided, and allow the credit-card company to collect its attorney’s fees in the event of a successful collections action. But sometimes, these provisions are actually fair, and they let a debtor who successfully resists the lawsuit to recover her attorney’s fees. It’s always worth a taking look at the underlying agreement!
  3. Counterclaim. If the creditor engaged in unfair or deceptive acts or practices, you can file a counterclaim under the Virginia Consumer Protection Act or the Fair Debt Collection Practices Act. Those statutes allows the wronged consumer to recover attorney’s fees.
  4. Requests for Admission. See if your lawyer will served some Requests for Admission on the creditor under Rule 4:11. If the creditor denies those admissions (or forgets to respond) and you later prove them at trial, you can recover the fees you incurred in doing so.
  5. Sanctions etc. Finally, for really bad actors, you can ask the Court to award you your attorney’s fees as a punishment under Code § 8.01-271.1, or you can even bring a second lawsuit for litigation misconduct under the Consumer Protection Act or FDCPA.

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