Understanding legal terms in debt collection cases

Cause of action

The Complaint will list one or more causes of action. This is a legal term for the reason why the plaintiff says you owe something. In a debt case, the most common causes of action are usually listed as breach of contract or one of several reasons that are grouped into a category called common counts.

Breach of contract

If the Complaint says breach of contract, this means the Plaintiff claims there was an agreement of some sort, and that you broke the agreement. A copy of the contract may be attached or the terms of the contract may be described. 

Common counts

Common counts refer to a set of reasons or theories for why the Plaintiff claims you owe money. The Complaint can list more than one common count.

• Open book account

  This claims you had an account with the Plaintiff or the original creditor, and that a record book (now typically an electronic statement) was kept for the account, and that you are being sued for the balance owed in the "book." 

• Account stated

  This claims that you received statements saying you owed a certain amount, and that you did not dispute the amount.

• Money had and received by the defendant for the use and benefit of the plaintiff 

  The Plaintiff alleges that it gave money to you, which needs to be repaid. 

• Goods, wares, and merchandise sold and delivered to the defendant for which the defendant promised to pay 

  The Plaintiff claims they sold something to you, and they're entitled to receive the fair market value of the goods or services sold. 

• Money lent by Plaintiff to defendant at defendant's request

  The Plaintiff claims it or the original creditor lent money to you, and is entitled to be repaid. 

• Money paid, laid out, and expended to or for defendant at defendant's special insistence and request

  The Plaintiff claims that it or the original creditor paid money to someone else, at your request, and is entitled to be repaid. 

If you're being sued by a debt buyer, they must include specific information in the Complaint

A law called the Fair Debt Buying Practices Act requirers that debt buyers must disclose certain information in the Complaint. If they don't follow these rules, you may be able to use this as your defense against the suit.

Information the debt buyer must state in the Complaint:

• That the Plaintiff is a debt buyer 

• The nature of the underlying debt and the transactions that caused the debt in a short and plain statement 

• That the debt buyer is the sole owner of the debt, or has authority to assert the rights of all owners of the debt 

• The debt balance and an explanation of the amount, nature, and reason for all interest and fees, if any, imposed by the original creditor or any subsequent purchasers of the debt. The explanation is required to identify separately the balance, the total of interest and fees accrued after selling to another creditor

• The date of default or the date of the last payment

The complaint should also clearly state:

• The name and an address of the original creditor at the time the debt was sold as well as the account number associated with the debt. The original creditor’s name and address is required to be in a form that is easy to identify.

• The name and last known address of the debtor as they appeared in the original creditor’s records prior to the sale of the debt. 

• The names and addresses of all persons or entities that purchased the debt, including the Plaintiff debt buyer. The names and addresses should allow you to reasonably identify each debt buyer.

• A debt buyer must also attach a copy of the contract alleged to have been broken, or a copy of the last statement in a revolving credit account. The failure to do any of these things can constitute a defense to the complaint. 

• The debt buyer is required to state they have complied with Section 1788.52 of the Code of Civil Procedure.