Do you have to sue for debt? Here's What You Should Expect

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Sued for Debt? Here's What to Expect
Act quickly if you're accused of an unpaid debt. You have choices.
Written by Sean Pyles Senior Writer | Personal financial, debt Sean Pyles leads podcasting at NerdWallet as the host and producer of NerdWallet's "Smart Money" podcast. The show "Smart Money," Sean talks with Nerds from the NerdWallet Content team to answer the questions of listeners about their personal finances. With a focus on shrewd and practical money tips, Sean provides real-world guidance that can help consumers better their financial lives. Beyond answering listeners' money questions on "Smart Money," Sean also interviews guests who are not part of NerdWallet and creates special segments on topics like the racial inequality gap and how to begin investing and the history of student loans.
Before Sean lead podcasting at NerdWallet He also covered issues related to consumer debt. His writing has been featured throughout the media including USA Today, The New York Times and other publications. When Sean isn't writing about personal finances, Sean can be found playing in his garden, going on runs , and taking his dog on long walks. He is based within Ocean Shores, Washington.





Feb 13 Feb 13, 2019


Editor: Kathy Hinson Lead Assigning Editor Personal financial, credit scoring, financial management and debt Kathy Hinson leads the core personal finance team at NerdWallet. Previously, she spent 18 years with The Oregonian in Portland in roles including copy desk chief and team director of design and editing. Previous experience included news and copy editing for a variety of Southern California newspapers, including the Los Angeles Times. She graduated with a bachelor's in mass communication and journalism from the University of Iowa.







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A letter comes from a law agency, warning of a lawsuit to collect to an older bill. It's a bit upsetting, but not uncommon.
It is possible to be the victim of an action if you've got past due medical credit card, credit card or any other consumer debt. If you don't pay promptly or show up for the court hearing, the creditor is likely to win -- and may get the right to take a portion of yourwages or bank account.
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The following article is from the article
What happens if you're in court for debt?
The law suits are a typical and effective method of debt collection. The state of New Jersey, for example the debt collection lawsuits accounted in 48% civil judgments in 2011, as per an . One attorney at a debt collection company has filed more than 69,000 lawsuits in just one year, the report was discovered.
A debt collection lawsuit is initiated when the creditor files a lawsuit in a state civil court in which you are listed as a defendant, along with your co-signer , if there is one. The complaint should explain why the creditor is suing you and what it wants. The majority of the time, it's the amount that you owe in addition to interest as well as attorney fees along with court expenses.
The creditor, collection agency or the attorney for the company will notify you about the lawsuit through "serving" you in the form of giving you a copy complaint and a court summons. The summons contains information about when and how you can file a formal response in court, and the date of the court hearing.
The debt collectors are betting that the majority of people won't attend their hearings, which leaves the judge to file a default judgment. If a default judgment is filed, the creditor might be in a position to:
.
Place a lien against your property.
Attempt to freeze part or all the funds in your account.

That's why you need to respond to the complaint and summons. Here's what to do.
Collect the information you need.
The person who is that is suing you will not be the first creditor you had. The debt may have been sold, perhaps several times over. You may find something that you recognize, or it may be an old invoice long neglected -- and now a -- that a debt collector has been able to revive.
Check your own records and any information you received in the mail, including the that the debt collectors must send. Determine:
Who is the creditor, whether the debt is correct and whether you actually have to pay the debt. Errors creep in as debt is sold and sold again; names and numbers could be wrong.
If the debt is beyond the . Once that passes, the debt is considered "time-barred." That means that you aren't legally sued -- but collectors may still try it, in violation of your . Your obligation to pay time-barred debt is still in place but the debt that is not paid will continue to hurt your credit.

Don't delay. It is common for you to have between 20 and 30 days after you receive the notification to file a response.
Respond to the lawsuit
"The most dangerous thing you can do is to ignore the suit," says Ira Rheingold who is the chief executive officer of the National Association of Consumer Advocates. This puts your earnings or bank account, as well as your home at risk. In addition, you could lose the ability to challenge that you are owed the debt.
The process of organizing your defense and writing your response may be difficult which is why you may need to consult an attorney. In most cases, lawyers will offer an initial consultation for free in the event that you prevail your case, the debt collection agency likely will be responsible for your legal fees. Many offices offer low- or no-cost services. Service members of the military can receive help from the local general office of the judge advocate.
An attorney may:
Make sure you point out defenses you weren't aware of.
Help you write the formal reply.
Represent you in court, if necessary.

A lawyer's guidance will assist you in writing a more complete response, which can make the debtor more likely to negotiate a deal with you. If you go further and go to the hearing with an attorney, Rheingold says, the collector "likely won't be able to verify the debt and it may be dismissed."
It is likely that you will need be charged a cost in order to file your response. Contact the court clerk for details on waivers of fees if you are unable to pay the cost.
Options for handling the hearing
Showing up for your hearing is vital. The judge will decide if you have to pay, and you'll have the chance to defend yourself or work out a deal with the creditor.
The way you deal with it will depend on whether you owe the creditor.
If you have to pay the amount
You have a few choices. Seek out the creditor before the hearing starts and determine if you can agree to:
Set up a payment plan in which you pay regular, reasonable installments on your bill until you've paid the bill off.
You can settle the debt for less than you originally were owed. If you can strike an agreement, you must to sign a contract which states that the creditor will consider the debt fully settled and will declare it to credit bureaus as paid.

A credit counseling company can help you comb through your finances to cover an installment plan or settlement. If you're still unable to pay for the debt that you owe, you might consider pursuing a different option , such as , for an opportunity to start over.
if you were the one to cause the debt however, you believe you shouldn't be required to pay it
There are a variety of situations in which you might have the right to refuse to pay a debt. You could be able to invoke these so-called affirmative defenses, for example:
The item you purchased was not as expected or was never delivered.
The debt contract was not enforceable or illegal in the event that you signed it on untruths.
The contract was cancelled within the lawful time frame.

These are just a few of the possible affirmative defenses. If you believe you have such a defense get legal advice on the best method to take.
If you don't have the debt
If you're being sued over an amount you don't have to pay or for a sum that you don't agree with, two words can give you a solid defence: "Prove it." In the court hearing, you can ask the creditor to provide the original debt agreement and show why you owe that amount. If it can't be proven, the judge can decide to dismiss your case.
The proper documentation is crucial however, it is also important to seek the help of qualified legal professionals to guide you through this process.
A lawsuit for a loan that you aren't sure about could be caused by identity theft, therefore you might want to investigate an something you aren't familiar with.
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Author bios: Sean Pyles is the director of production and host for the NerdWallet's Smart Money podcast. His writing has been featured in The New York Times, USA Today and elsewhere.







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