Sued Over Old Debt, and Blocked From Suing Back

… the title of a New York Times article discussing how debt collectors use the courts to sue, but bar a subsequent suit by the debtor (or alleged debtor) based on an arbitration clause in the debtor’s original contract with the creditor.

The article discusses several cases where individuals who either didn’t know about the collector’s lawsuit or who failed to appear, subsequently file a class action against the collector. Despite the fact that the collector waived arbitration and sued, the courts hold that the debtor’s suit is a separate matter and subject to arbitration and class action waiver. The article highlights what we all know, “Once a class action was dismantled, court and arbitration records showed, few if any of the individual plaintiffs pursued arbitration.”

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