If you ever wonder how debt collectors that just buy a line on a spreadsheet manage to get judgments in 99.9% of their cases, here's basically how it goes. 99% of the time the defendant doesn't answer, so the plaintiff gets a default judgment. In the 1% that answer, the plaintiff sends interrogatories and requests for admissions. 90% of the time, the defendant fails to answer the request for admission, so the plaintiff uses the lack of answer as an admission, so they file a motion for summary judgment based on that. Almost no self-represented defendant can file a proper response to a motion for summary judgment, so the defendants win again. If you are served with requests for admisisons, you must take them as seriously as the initial complaint and answer them. It is important that you don't admit that you the JDB bought the debt (you don't have any way of knowing) and you dont admit that you owe JDB (again, you don't know that they really bought the debt). Also, don't assume that you can't afford an attorney or that no attorney will talk to you.
Don't assume that you can't afford attorney advice. Many members of my organization, the National Association of Consumer Advocates will talk to you over the phone the first time for free. If the attorney identifies a Fair Debt Collection Practices Act violation, he/she will usually represent you on a contingent fee basis. If the case is purely defensive, most consumer attorneys (including me) do charge a fee to the client, because that's the only way we can get paid in a defensive case, but in a few states it's different. In those states if one side can get attorney fees then both sides can no matter what the contract says. In those states it's easier to find an attorney if you don't have money. Here's a link to the NACA find an attorney page so you can find an attorney in your area.
Regarding Arbitration: As a general rule the success rate in arbitration isn't any better than in court. As a general rule consumer attorneys dislike arbitration because the creditor picks the forum. There are some exceptions to the rule though. If you are an unrepresented consumer being sued in court in a lawsuit that you seem sure to lose, filing a demand for arbitration on the record in court and served on the suing party may be a worthwhile strategy, especially when the arbitration rules require the business to pay the lion's share of the costs. Under the Consumer Arbitration Rules of the AAA, for example, the consumer's costs are limited to 200-250, whereas the business will generally be paying at least 10 times that much. In JAMS, the maximum fee to the consumer is $250. Note in JAMS either party has the right to bring the case in small claims court. This means that if the collector filed in small claims court, you probably don't have the right to compel arbitration. You can try though.
In my practice I am trying out a legal theory under the Indiana Deceptive Consumer Sales Act, arguing that it is a deceptive practice to put an arbitration clause in a contract when you don't intend to arbitrate. For the AAA, the business is supposed to register a contract with an arbitration clause that references the AAA. If they don't register the clause, they can still arbitrate, but they have to pay an extra fee. In my case, we demanded arbitration but the business, a car dealership, refused to pay its fee, so the AAA declined to take the case, freeing us up to sue in court.
Steve Hofer, attorney, Consumer Law Office of Steve Hofer, Indianapolis, Indiana.