It used to be a rare occasion when a consumer was sued on a defaulted debt. Not any more. I’ve recently seen an article in the New York Times about the uptick in debtor lawsuits as a collection method and resulting garnishments. This seems to match what I’ve been hearing from my readers.
Most people are terrified of the court system and don’t bother showing up in court when served with a lawsuit. The final result: a judgment. Once a creditor has a judgment against a consumer, they can get a court order to receive a portion of the consumer’s wages (a.k.a. garnish wages) until the debt is paid off.
So what can you do if you are being sued? Answer the lawsuit. If you don’t answer the suit, you automatically lose. In addition, by filing an answer, you greatly increase the chance the creditor will dismiss the lawsuit. In other cases the collection agency rent-a-lawyer won’t bother to show up themselves – giving you the automatic win. Some lawyers who work for big collection agencies file as many as 50 lawsuits a day. Why spend time on a consumer who fights back when there are plenty who won’t resist?
How to file your answer:
- Take Action Immediately! Most complaints need to be answered right away, within 20 to 30 days. Don’t wait until the last minute.
- Look for the Complaint Allegations. You will get a complaint along with the notice of the lawsuit which has items such as “The Plaintiff is Collection Agency X”, “You are Consumer Named X”, “You had a credit card with Creditor X”. There will typically be a list of not less than 4 and no more than 12 items.
- Can you Use a Form? Some courts have forms that you can use for your answer. It’s to your advantage to use one, as this ensures you are following court procedures correctly. If no form is available, you can type up your answer in a Word or Text Document.
- State Whether You Admit or Deny. You need to answer each of the points or allegations contained in the complaint with “Admit” or “Deny”.
- List Your Defenses. What’s a defense? It’s a required procedure you claim the lawyer is violating. For instance – if you think a collection agency is suing you for a debt you don’t owe, you can claim “lack of legal standing”. This forces the lawyers to provide proof of the debt. For a complete list of defenses you can use, take a look at our “Affirmative Defenses” page. You would list your defenses after you “admit” or “deny” each allegation in the complaint.
- File Your Paperwork with the Court. In some cases, you can just send it registered mail. To find out, call the court clerk. Also, find out if you need to send your answer to the law firm as well as the court.
Other things to consider:
- If You Can Afford a Lawyer, Get One. Even if you think you can’t afford a lawyer, weigh the consequences. Is spending a few hundred dollars on a lawyer cheaper vs. having a $14,000 judgment entered against you and having your wages garnished?
- Take a deep breath. Filing your answer will usually delay any court action for another 2 months, giving you plenty of time to think and do research.
- Other resources. We have a large amount of information about tackling a lawsuit on your own. You might want to have a read.
Need a shot of courage (and we don’t mean tequila)? Here are some posts you might want to read documenting readers who successfully defended themselves in court:
- Readers win against Midland Funding.
- Won in Court
- Collection Agency Hires Crappy Lawyer
- Collection Agency Case Against You in Lawsuit is Pretty Weak/
Moral of the story? Fight Back!
Disclaimer: I am not a lawyer – before taking any advice, please do some research or get a legal opinion.