If a creditor or debt collector sues you, you must raise any defenses or claims you have in your formal response. You do this by stating either an affirmative defense in your answer or filing a separate claim, called a counterclaim, in a complaint that you file against the creditor.
(Learn more about creditor lawsuits, including how they begin, when to respond, and what happens in court, in our Creditor Lawsuits area.)
An affirmative defense goes beyond simply denying the facts and arguments in the complaint (although you must do that, too, by formally denying the facts and conclusions you disagree with). An affirmative defense sets out new facts and arguments which, if proved in court, would make the creditor lose on that part of the claim. If you prove your affirmative defense, even if what the complaint says is true, you will win or, at least, reduce the amount you owe.
Listed below are some examples of affirmative defenses you might be able to state in your answer:
A counterclaim is the basis of a lawsuit you have against the creditor or collector. It may be based on different issues from those in the complaint. You may even be asking for more money than the plaintiff wants from you. In many states, however, the counterclaim must arise out of the same transaction for which you are being sued.
Here are examples of some counterclaims you might want to make against the creditor or collector. To raise a counterclaim, you will usually have to serve and file your own complaint and pay a filing fee within the time you have to respond to the complaint. If you succeed on a counterclaim, you may be entitled to monetary damages from the creditor or collector, or at least to rescind (cancel) the contract with the creditor.
This is an excerpt from Nolo's Solve Your Money Troubles: Debt, Credit & Bankruptcy, by Margaret Reiter and Robin Leonard.