In the event of a lawsuit, please head for the nearest lawyer
If you’ve been paying attention to this blog or the recent surge in debt collection reporting (this article, for example), you probably have a general idea of how the system works. Debt collectors (both debt buyers and debt collection law firms) sue people as fast as they can fill in the blanks on their summons and complaint forms. Roughly 95% of those lawsuits go unanswered, so the debt collectors end up with a judgment for the debt plus interest (and often other, often unlawful, charges) plus attorney fees and costs. Then, they find the debtors’ bank accounts and employers and start collecting by garnishing wages, seizing funds from bank accounts, and worse.
If you are a tenant, the system works roughly the same, although landlords don’t usually have quite so many people to sue.
So what do you do if you find out someone is suing you? Find out after the jump.
First of all, you may not get served properly. However, this does not mean you can ignore the lawsuit. This is very important. Debt collectors in particular will rarely bother to find a correct and up-to-date address for you. I’m starting to wonder if they even bother to hire a competent process server in the first place. However, just because you aren’t involved doesn’t mean a lawsuit isn’t going on.
Proper service means (1) handing you a copy of the Summons and Complaint, (2) leaving a copy with a person “of suitable age and discretion” at your last-known address, or (3) various more involved ways that debt collectors will rarely bother to use. Ducking service isn’t a very good idea. It doesn’t work, for starters, and the debt collector may just go and carry on with the lawsuit anyway.
If you do get served with a summons and complaint, find one lying on your doorstep, or hear about a lawsuit against you in some other way, you have twenty days to respond. A response is not simply calling the lawyer whose signature appears at the bottom of the documents. A valid response is a written answer admitting or denying the allegations in the complaint, delivered to the plaintiff’s attorney.
Answering is a delicate business. If you don’t make certain defenses (like improper service of the summons and complaint or expiration of the statute of limitations), you lose the right to make that defense. Now is the time to talk to a lawyer. Where do you find one? I would recommend the NACA Member Database. A NACA attorney should be familiar with debt collection defense and be able to tell you your options.
Let’s dispel a common misconception: It doesn’t cost anything to call a lawyer. Ask right away if they give free consultations. Most lawyers do. I don’t know any that don’t, actually.
Let’s dispel another: It doesn’t cost $10,000+ to hire a lawyer. Debt buyer defense is rarely work-intensive, although it will take up some time. I am aware of several consumer lawyers, including myself, who take debt collection defense cases based on a percentage of the alleged debt.
But here’s the most important part: Call that lawyer as soon as you get served with a lawsuit or find out you are being sued. If you don’t answer, you have no right to challenge the debt obligation, the amount of the debt, the additional interest, charges, or attorney fees, or anything else about the debt. In other words, if you ignore the lawsuit, you are screwed. Call that lawyer.
[...] Following up on this post (In the event of a lawsuit, please head for the nearest lawyer), I thought I would talk a little bit about what to do after you are sued and after you answer the debt collection complaint. (If none of that made sense to you, go ahead and find yourself a consumer lawyer. [...]
I need help. I have been threatened by an internet payday advance company to pay a debt that I do not owe. A former employee used my name as an employment reference. This company has violated FDCPA. Uncountless times. I live in South Carolina. I have recorded a conversation that proves disclosure of the debt to a 3rd party-me, They provided me with her social security number and claim to have mine which will be used to file in court. Told me I would be going to jail if I did not pay her debt today. Threat to my credit. Claim they are researching my financials. They are Interim Cash Reno NV- and I know they don’t exist there. I have over 20 years in the collection industry. My fear is this is an Internet company from an unknown location. They just could do somthing like file a suite against me. And I don’t owe this. I have research. We have no protection laws against these companies in the United States. Almost every state I have researched is filing claims. But these companies wont awnser they disappear and re establish in another state under a new name. I am terrified. I am trying to sue them but can’t find them. We need to stop talking about these problems and really do somthing about it. I feel we can enforce protection for victims like me. At the right time I am going to go public and will need a good attorney beside me. Please respond.
Kathleen Burkart
xxx-xxx-xxxx
South Carolina USA
Please see previous comments
Hi Kathleen:
This is a public blog, and I do not offer legal advice in this forum. Also, I do not practice law in South Carolina. It sounds like you need an attorney, and the best place for you to find one is naca.net.
p.s. - You might not want to go around leaving your phone number in public blog comments. I redacted it to protect your privacy.
[...] I met with a potential client today and learned about a new-to-me shady debt collection practice. The law firm in question served a complaint on the debtor, who failed to answer because she did not realize that she (effectively) had no rights unless she showed up in court to assert them. She also didn’t talk to a lawyer at the outset like she should have. [...]
How do you handle phone calls from debt collectors when it isn’t your debt? They seem to have just looked up a name in the phone book and started calling me. They have given me bits and pieces of info on birth date (that doesn’t match mine) and I am pretty sure they don’t have my SSN or address.
My concern is that if I respond in writing to tell them it isn’t me then they will associate my address with this debt as well. At the moment I am in the do-nothing camp. From what I have read they have to send you information in writing for it to be official but I have not received anything (probably because they have the wrong person and their only connection to me is my phone number).
You have 30 days to dispute the debt and ask for validation, which you should do in writing. I would also suggest sending it by certified mail. Let them know that they have the wrong person, if you think they do, and tell them why.
[...] When you are sued, you get a summons and a complaint. The complaint lays out the causes of action–in the case of debt collection, the reasons why the debt collector things you owe them money. One of the causes (usually referred to as “counts” in the complaint) you will often see is “account stated” together with a statement that an account “has become stated between the parties.” [...]
I HAVE A QUESTION I WAS SERVED AND AT THAT TIME I SENT OVER MY CHARITY CARE PAPERWORK LETTING THE COLLECTION AGENCY KNOW THAT ALL DEBTS WERE TAKEN CARE OF AND THAT THER SHOULD BE A 0 BALANCE 2 MONTHS LATER I FIND OUT THEY WENT AHED AND SUED ME ANYHOW THEY GOT THIER JUDGEMENT EVEN THOUGH THEY KNEW THE DEBT WAS PAID CAN I SUE THEM?? SOMEONE PLEASE HELP ME OUT WITH THIS AND LET ME KNOW IF I HAVE A VALID LAWSUIT SO I CAN RETAIN A LAWYER I AM HAVING A HARD TIME GETTING THIS QUESTION ANSWERED MY EMAIL IS imincollege.com PLEASE HELP ME
Hi Tina: We do not give legal advice on this blog. Please look for a consumer lawyer in your state. The lawyer database for the National Association of Consumer Advocates is a great place to start. Here is the link: http://members.naca.net/findanattorney.php