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Being Sued for a Debt – Review Your Options

On Behalf of | Jan 3, 2013 | Consumer Protection

You are being sued for an old debt.  What should you do?  You are overwhelmed and need some advice.

Why are you being sued? The purpose of the lawsuit being filed by the creditor or collector’s attorneys is because they ultimately want to seek a judgment against you and then garnish your wages or attach to certain assets of yours.

What happens if I ignore the lawsuit? If you ignore the lawsuit, you will be held in default and a judgment will be entered against you.  Once the creditor or collector has a judgment, they will be able to garnish your wages or bank account.

What are my options?

Can you afford a lawyer?
Many consumers make the assumption that hiring and paying for a lawyer to defend a lawsuit is far too expensive.  You don’t know this until you ask.  There are many law firms out there (SmithMarco, P.C. for instance) that would be willing to help a consumer in this situation, and would be willing to work out a reasonable fee and an easy payment option.  The money spent on a lawyer can save hundreds or even thousands more that could be paid to the creditor.

Respond to the lawsuit Read the summons and complaint carefully.  See what you need to do and if there are any deadlines.  If you have questions, call the clerk or seek local counsel or legal aid.  Each court has different rules and procedures.  Make sure you follow the court rules.  Keep copies and if you mail any written document, mail it certified mail with receipt.

Review your defenses
The three most popular defenses include:
1) This is not my debt.
2) This is my debt, but it has been paid in full.
3) The Statute of Limitations has expired and the collector can not sue me for this debt.

Settle before the court date Contact the collector and see if they are willing to settle out of court.  If you can reach a settlement, be sure to get it in writing.  A settlement is a better option than a judgment.  With a settlement, the collector can not garnish your wages or bank account.  Plus, you will avoid the court fees and interest that comes with a judgment.

Hire an attorney If you are being sued for debt $5000 or greater, consider hiring an attorney.   This will be less stressful on you and it might work out to your benefit both emotionally and financially.  You should call around and find an attorney who will provide a free consultation. If you are being treated unfairly by the collector, your rights under the Fair Debt Collection Practices Act might be violated. Under the Fair Debt Collection Practices Act, a debt collector CANNOT:

  • Use any profane language or any language that is harassing and abusive (FDCPA 15 U.S.C. 1692d)
  • Engage in any conduct, the natural consequence of which is to harass, abuse or oppress. ( FDCPA 15 U.S.C. 1692d)
  • Make any misrepresentations of fact, such as how much is owed, or certain actions they may take to force payment( FDCPA 15 U.S.C. 1692e)
  • Threaten arrest or criminal prosecution ( FDCPA 15 U.S.C. 1692e)

If a debt collector has engaged in any of the above conduct that is not allowed by the FDCPA statute of limitations, or has been deceptive to you in any other way, contact our office for a free case review.

File for Bankruptcy If this debt is for a large sum or you have multiple debts, it will make sense to consider bankruptcy for the following reasons:

  • Give you a fresh start by eliminating most or all of your debts.
  • Force creditors and collectors to leave you alone.
  • Stop any garnishments that are proceeding or about to begin.
  • Place a stop on any lawsuits pending against you.
  • Have all outstanding balances removed from your credit report. The fact that you filed for personal bankruptcy may appear on your credit file, but the creditors must report that the balance owed on the account is zero).

What if you do not work, will the judgment affect you? Maybe, maybe not. Income from social security, disability payments and unemployment can not be garnished.  These assets are exempt funds. Review your assets.  Do you have a house or vehicle or a savings account?  If you have a judgment against you, the collector can file a lien against your property and/or freeze your bank account.

When you’re being pursued by debt collectors or being sued for a debt, you have rights, and we’re here to help.  SmithMarco, P.C. has been protecting consumer rights since 2005. If you feel that you’re rights have been violated, please contact us for a free case review.