What to do if a Creditor or Debt Collector Sues Me

When you owe a debt and you aren’t able to make the required payments, creditors will begin taking action to collect. In the beginning, they may simply send letters or call your home. As time goes on, however, creditors may become more aggressive. They may sell your debt to a debt collector, or they may decide to continue pursuing the debt on their own. In either case, you may eventually face a lawsuit from a creditor or debt collector.

About Debt-Related Lawsuits

A judgment is a court order that allows a creditor or debt collector to use stronger debt collection tools against you. If a creditor or debt collector is able to obtain a judgment, they can exercise this order by garnishing your wages, removing funds from your bank account and/or placing a lien against your property. The specific tools available depend on state law.

Judgments are usually awarded for the amount of debt you owe. The court may also increase this amount to cover attorney fees, interest and/or collection costs.

Dealing with a Lawsuit

If you are served with a lawsuit, it is natural to feel overwhelmed, but you still have options. Follow the tips below to deal with this matter effectively.

  • Don’t refuse to accept service
  • Read the lawsuit
  • Respond by the deadline
  • Consider negotiating an out-of-court settlement
  • Attend the hearing

1. Don’t refuse to accept service.

Some people mistakenly believe that they can prevent a lawsuit from a debt collector simply by refusing to accept delivery of the paperwork. However, refusing to accept service won’t stop the lawsuit from proceeding. Ignoring the lawsuit will only make matters worse, as it makes it more likely that the judgment requested in the lawsuit will likely be issued against you.

2. Read the lawsuit.

After receiving service, read all of the paperwork thoroughly. This paperwork will tell you who has filed the lawsuit, why the lawsuit has been filed, the amount of money the creditor or debt collector has asked for, the deadline for receiving a response and all of the relevant details about the hearing. Be sure to make note of deadlines and hearing dates. If you notice any inaccuracies in this paperwork, make note of those as well.

3. Respond by the deadline.

Perhaps the most important thing you need to do after you know you are being sued is respond to the lawsuit. The paperwork you receive will include a deadline by which you must submit any responses. In some states, you will be required to file a response to the lawsuit if you want to contest any of the allegations that have been made against you. In other states, you will be able to contest allegations in court. However, if you disagree with any of the information included in the lawsuit paperwork, it is best to file a formal response before the hearing. In this response, you can contest specific information, ask the court to dismiss the lawsuit and/or file a countersuit against the creditor or debt collector. You can file this response with or without the help of an attorney.

4. Consider negotiating an out-of-court settlement.

If you don’t want to contest any of the details of the lawsuit, it may be in your best interest to settle outside of court. You may be able to negotiate a settlement by contacting the debt collector or creditor directly and offering a partial payment or payment. Creditors and debt collectors are often willing to accept these offers because it allows them to avoid court costs and other fees associated with debt collection. If you are able to reach a settlement, be sure to get all of the details in writing and file it with the court.

5. Attend the hearing.

If you are not able to reach a settlement, you should attend the scheduled hearing whether or not you are able to contest any aspect of the lawsuit. If you attend the hearing, the creditor or debt collector will have to produce proof showing you owe the debt in order to obtain the judgment. However, if you don’t attend the hearing, you run the risk of the court automatically issuing the requested order.

Being served with a lawsuit is always frightening, but you can fight back. In addition, many consumer law attorneys offer free consultations, so don’t be afraid to seek assistance if you aren’t sure how to move forward. Contact Amourgis & Associates today at (330) 535-6650 for guidance.

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