Have you been sued over a debt?
If you have, you have the right defend the lawsuit even if you think that you owe the debt. If you defend the lawsuit and win, you would not have to pay the amount the creditor alleges you owe. You can also attempt to settle the lawsuit and pay a lower, more affordable, amount.
Debt Defense, How Defending the Case Works
Many times creditors and debt collectors cannot or do not produce all of the documents they are required by law to produce in order to win a lawsuit. Therefore, they are willing to settle claims for less than what you owe or they are unable to win the lawsuit altogether. For example, in a lawsuit over a credit card debt, the plaintiff is required to produce all of the credit card statements from a $0.00 balance to the amount that they allege you owe, the applicable credit card agreement, and, if they purchased the debt from a different company, a valid assignment demonstrating that they now own the debt. Debt collectors often don’t have all of these documents in their possession and original creditors would rather settle the case for a lower amount instead of litigating.
However, it is important that you hire a lawyer experienced in defending collection lawsuits so that you can properly raise these defenses and to determine if you have any other defenses to a collection action.
Debt Collectors and Collection Lawsuits
Debt collectors purchase millions of dollars of debt from original creditors in bundles for pennies on the dollar. They then attempt to collect on the individual debts by obtaining default judgments against consumers. Debt collectors often know they cannot win a lawsuit if a consumer defends it, which is why their business model is focused on default judgments. Debt collectors often successfully obtain default judgments because consumers ignore the lawsuit or otherwise miss their deadlines to respond. Therefore, generally, a debt collector’s business model is not to fight lawsuits and win. It is to file a lot of lawsuits and get default judgments against consumers that do not respond to the lawsuits.
Default Judgements in Collection Lawsuits
A Plaintiff can obtain a default judgment against a Defendant if the Defendant does not respond to the lawsuit within the applicable amount of time. The amount of time you have to respond to a lawsuit depends upon which court you have been sued in and where you have been sued. You should call a lawyer immediately after receiving notice of a lawsuit to protect your rights.
If you allow a creditor or debt collector to get a default judgment against you, they will have much greater powers to collect the amount that they allege you owe. For example, after a judgment has been entered against you, the creditor can, among other things, attach bank accounts, have the sheriff conduct a sale of your personal property, and obtain liens against real estate that you own. You also lose many of your rights to defend the lawsuit. The winner of a default judgment also has much less incentive to negotiate a settlement as well since they already have a court order stating that you owe the full amount of the debt.
It is important not to let a judgment get entered against you. Do not ignore a collection lawsuit. You must act to preserve your rights to defend the lawsuit.
Call us today at 570-371-3737 for a free consultation regarding your options for defending a collection lawsuit. If you fail to act, you will let them win.
Additionally, creditors often break the law when they try to collect a debt from you by, among other things, placing phone calls to you without your permission or by engaging in threatening or deceptive conduct. We will also provide a free review of any collection activity against you or other problems with creditors you may have. If a creditor has violated the law, you may have a right to file a lawsuit against the creditor for money damages.