What to do When You’re Sued for Debt
The Process
The lawsuit starts when the creditor or collection agency files a “complaint” with the court. In the complaint, you and anyone else who cosigned on the debt will be listed as defendants. The complaint will also say why you’re being sued, and what the creditor wants, including the money you owe, plus interest, and sometimes, attorneys’ fees and court costs. The creditor will serve you with the complaint and summons, which is usually delivered via local sheriff. The summons notifies you that you are being sued, and provides additional information, such as when you need to file a response to the complaint in court. The first step you should take upon receiving the summons, is contacting the attorney that filed the complaint and see if you can come to some resolution regarding the debt—work out a new payment plant, provide him/her with proof of payment, provide him/her with proof of bankruptcy, etc.If you are unable to work something out with the creditor’s attorney, you typically have approximately thirty days to file a written response to the complaint. The document you file in response to the complaint is typically referred to as the “answer,” but if you believe you have grounds to defeat the allegations in the complaint, you can also file a “motion to dismiss” asserting those grounds. Below, in the “Defenses” section are some of the typical defenses that will defeat a creditor’s complaint. If you ignore the complaint by not replying with an answer or motion to dismiss, your inaction may result in a judgment being entered against you for the full amount requested by the creditor in the complaint. .
Defenses
The best defense to a creditor’s lawsuit is payment of the debt. If you are current on the debt, tell the court. If you are not current on the debt, but are able to get current, do it and then tell the court. Other common defenses to creditor’s lawsuits include mistaken identify (i.e. the creditor filed suit against the wrong person), fraudulent charges (i.e. someone fraudulently created the debt in your name via identity theft of otherwise), the debt being discharged in bankruptcy (i.e. you have already filed and completed bankruptcy), and the expiration of the statute of limitations (i.e. the creditor did not timely file the lawsuit). Also note that certain income and assets are not subject to garnishment to repay a debt or judgment, such as Social Security payments.Seek Help
Properly handling a lawsuit filed against you for recovery of a debt can be difficult. If you are sued for debt, it is a good idea to hire a lawyer to help you sort out your defenses, determine the appropriate course of action, and represent you in the lawsuit, if necessary. Never ignore lawsuits. Many lawsuits that are filed for collection of debt end up in default judgment because the borrower never shows up.Debtors often hesitate to contact an attorney when they are being sued over a debt because they believe they can’t afford one. Attorneys who regularly defend these types of cases, however, will typically offer a free consultation and may represent a consumer on a contingency basis if they believe the debt collector has broken the law, with the expectation that they will recover attorney’s fees from the creditor. Notably, if you believe the debt is legitimate and cannot afford to repay the debt, it might be best to consult with a bankruptcy lawyer.
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Posted - 06/29/2017
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