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

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Do you have to sue for debt? Here's What You Should Expect
Take action quickly if you've been sued for debt. You have choices.
Written by Sean Pyles Senior Writer | Personal finance, credit, and personal finance Sean Pyles leads podcasting at NerdWallet as the producer and host of NerdWallet's "Smart Money" podcast. In "Smart Money" Sean talks with Nerds across the NerdWallet Content team to answer listeners' personal finance questions. With a focus on shrewd and practical advice on money, Sean provides real-world guidance to help people improve the financial situation of their lives. In addition to answering listeners' financial questions on "Smart Money" Sean also interviews guests who are not part of NerdWallet and creates special segments that explore subjects like the racial inequality gap, how to start investing and the history for student loans.
Before Sean was the host of podcasts at NerdWallet the company, he also wrote about topics that dealt with consumer debt. His work has appeared on USA Today, The New York Times as well as 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 lives in Ocean Shores, Washington.





Feb 13, 2019


Edited by 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 editor and designer. Her previous experience includes news and copy editing for several Southern California newspapers, including the Los Angeles Times. She earned a bachelor's degree in mass communication and journalism at The University of Iowa.







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A letter comes from a law firm warning of a lawsuit to collect to an older bill. It's upsetting, but hardly unusual.
You may get hit with a lawsuit if you have past due medical credit card, credit card or any other consumer debt. If you don't respond on time or appear at the court hearing, the creditor is likely to prevail- and may get an opportunity to get some of your earnings or your the bank account.
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The following article is from the article
What happens if you are in court for debt?
The use of lawsuits is a popular and efficient debt collection tactic. In New Jersey, for example, debt collection lawsuits accounted in 48% civil judgments in 2011, according to a . A firm that collects debts filed 69,000 lawsuits in one year, it found.
A debt collection suit is filed when the creditor files a complaint before a civil court of the state listing you as a defendant along with your co-signer if they have. The complaint will explain what the reason the creditor has decided to sue you, and what they want. It's usually the amount you owe plus interest, and maybe attorney fees as well as court fees.
The collection agency, creditor or attorney representing it will then notify you about the lawsuit through "serving" you in the form of sending a copy of the complaint as well as a court summons. The summons contains information about the time and method to respond in a formal manner to the court, and the date of the court hearing.
They are betting that a majority of people will not attend their hearings, which leaves the judge to file the default judgment. In the event of a default judgment, the creditor might be able to:
.
Place a lien against your property.
You can try to freeze a portion or all of the money in your bank account.

That's why you need to take action to the complaints and summons. Here's what to do.
Collect information
The creditor suing you is unlikely to be the original creditor. The debt may have been sold, possibly several times. It may be something you recognize, or it may be an old invoice long forgotten -- now a creditor or debt collector has been able to revive.
Examine your own records as well as any information that you receive in the mail, such as those that debt collectors are required to send. Determine:
Who is the creditor, whether the debt is correct and whether you actually have to pay the amount. Errors creep in as debt is sold and sold again; names and numbers could be wrong.
The debt must be paid off by the . When that time has passed, the debt is considered "time-barred." This means that you aren't legally sued -- but collectors may still try it, violating your . Your obligation to pay time-barred debt remains, however, and the debt that is not paid will continue to affect your credit score.

Don't delay. It is common for you to have between 20 and 30 days after you receive the notification to respond.
Response to lawsuit
"The most dangerous thing you can do is to ignore the lawsuit," says Ira Rheingold who is the executive director of the National Association of Consumer Advocates. This puts your earnings, bank account or property at risk. Worse, you can also lose the right to contest that you owe the debt.
The process of organizing your defense and writing the response could be difficult, so you may want to consult an attorney. In most cases, lawyers will offer free consultations, and if you win your case, the debt collection agency is likely to be required to pay the legal costs. A lot of offices provide affordable or free services. Military service members can get assistance by contacting their local Judge Advocate General Office.
An attorney can:
Make sure you point out defenses you didn't know about.
Help in writing an official response.
Represent you in court, if necessary.

Guidance from an attorney will assist you in writing a more complete response, which might make the creditor more likely to pursue an agreement with you. If you go a step further and attend your hearing in the presence of an attorney, Rheingold claims that the creditor "likely won't be able confirm the debt, and it could be dismissed."
It's likely that you'll have make a payment to submit your response. Request the clerk at the courthouse for details on fee waivers if you can't pay the cost.
Alternatives for dealing with hearing loss
Being present for your hearing is vital. The judge will decide whether you must pay and this is your opportunity to defend yourself or negotiate a bargain to negotiate with your creditor.
How you handle it depends on whether you are owed the creditor.
If you are in debt
There are a variety of alternatives. Find out the creditor before the hearing begins and see whether you can reach an agreement on:
Set up an installment plan that allows you to make regular, affordable installments on your bill until you've paid it off.
Pay off the debt at a lower amount than you originally were owed. If you can strike an agreement, you must to get a written agreement that says the creditor will take the debt as fully paid and notify the credit bureaus as a payment.

from a nonprofit credit counseling company can assist you in analyzing your financial situation to pay for a payment plan or settlement. If you still can't afford to pay what you owe, you may be able to consider an alternative solution, like a an opportunity to start over.
If you have incurred the debt, but think you don't need to pay
There are several instances in which you might have standing to refuse to pay the debt. It is possible to invoke these so-called affirmative defenses the circumstances are:
The product you purchased was defective or never arrived.
The debt contract was not enforceable or unenforceable or you signed it based on falsehoods.
You canceled the contract within the legally-required time frame.

These are only a few of the possibilities for affirmative defenses. If you believe you be able to defend yourself, seek 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 an amount that you don't agree with two words can provide you a solid defense: "Prove it." At the hearing you could ask the creditor to provide the original debt agreement and to prove why you owe the amount specified. If that's not possible be proved, the judge could decide to dismiss your case.
The proper documentation is crucial, but also seek the help of qualified legal professionals to guide you through this process.
A lawsuit for a debt you don't recognize may be the result of identity theft, therefore you may want to for activity you don't recognize.
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About the author: Sean Pyles is the host and executive producer for the NerdWallet's Smart Money podcast. His writing has appeared in The New York Times, USA Today and elsewhere.







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