The process of being sued can be intimidating. Before you start to panic when a process server shows up at your door, take a deep breath. A debt lawsuit is not a criminal proceeding. It is important that you respond to the suit, but it is equally crucial that you not overreact to the situation. Do a little fact checking to uncover the reality of presenting a debt lawsuit defense while saving your sanity.
What You Might Expect When Served With a Debt Lawsuit
You have been fighting with a variety of creditors for months or even years. Now you are served with a court summons for a debt lawsuit. You imagine your car being repossessed and the house being put on the auction block. The suit includes another pile of court fees on top of the interest that you cannot afford to pay in the first place. All you can see is a life of misery and poverty. There is a real temptation to just ignore the summons because there is nothing more that you think you can do.
No matter how bleak the outlook may appear, you do have options and the reality may not be quite as bad as you think.
What Really Happens During a Debt Lawsuit
The summons in the first step in the legal proceedings. It tells you what court will be hearing the suit, when your suit will be heard, and it also provides information on how to build your debt lawsuit defense. Most suits require a response from you within a month. If you do not believe that you owe the debt or that the creditor is filing an unfounded suit, now is the time to get some legal advice.
Collection Agencies May File an Unfounded Lawsuit
Even though there are statutes of limitations in order to file a suit to collect on a debt, some collection agencies will file a late suit. They do this because a large percentage of Defendants never respond to the summons. The overworked courts are likely to issue a finding in the creditor’s favor when you are not there to fight your case.
Gather all statements and contracts that are associated with the debt and bring them with you to court.
Some creditors file a lawsuit against the wrong person as information on the debt can get corrupted as the debit is sold from one agency to another. You need to investigate the debt they have filed against and present any errors to the court.
The Court Can Order Bank Garnishment
If the court does find in favor of the creditor because you did not fight the suit, your bank accounts can be garnished. The garnishment will include court fees and any fees created by the creditor. You could end up paying even more than you really owe when this happens.
Showing Up is the First Step in Winning Your Suit
Many debt lawsuits are dismissed during the first hearing when the defendant appears before the judge with proper documentation of payment. Perhaps the creditor has harassed you, violating consumer protection laws in their efforts to collect. That is another way that you can have the lawsuit dismissed.
Court procedures can be intimidating if you have never been sued in the past. Hiring an attorney to help with your debt lawsuit, even if it is for a minimal amount of money, can help the court reach a quick decision in your favor. Dismissing the suit protects your credit rating.
Checking the Details on the Debt
Was your debt sold to a collection agency such as Portfolio Recovery Associates or Midland Funding? If you do not recognize the debt cited on the summons, you may need to do some footwork to determine if the debt is really yours. If you work with a debt attorney, they can help you obtain the paperwork associated with the original debt. You may discover that the amount is wrong, unlawful fees are included on the total amount, or that it belongs to another person.
Your House Cannot Be Taken in an Unsecured Debt Lawsuit
Most debt lawsuits are filed for small amounts. The original debt was likely unsecured–like a credit card or personal loan. The agency that files the suit cannot force you to sell your house or your car in order to pay off the debt. The court will not award them the deed or title to your property. Only a bankruptcy court can actually force you to sell off property, but giving up your boat may be a good idea to satisfy your creditors.
Most Debt Lawsuits are Settled Out of Court
In many instances, defendants that respond to a debt lawsuit summons settle the suit outside the actual courtroom. Even though you have been served, the creditor really just wants to recoup their losses. If you call the creditor before the court date, you may be able to settle the account by paying the principal and only some accrued interest. They can dismiss the suit up until the court date.
Are you faced with a debt lawsuit? Call Debt Legal Defense today and build your debt lawsuit defense with the help of a trained professional.