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July 24, 2011

FAQs Debt Collection Lawsuits Answers to the Most Frequently Asked Questions

Posted by Dan Dewoskin in Blog, Debt Collection Defense

Tags: Debt collection, debt defense, lawsuit

Frequently Asked Questions

Answers to the most frequently asked debt collection questions….

I am not aware of any lawsuit against me, but I keep getting these lawyer advertisements in the mail about some lawsuit. How can I find out more information?

You will often receive a lot of solicitations in the mail before you are even aware that the lawsuit has been filed.  Why? Because the filing of lawsuits is public record and many bankruptcy and consumer attorneys get the list of debt collection defendants and their addresses before the process server has actually served you with the lawsuit.

If you are in DeKalb County, the phone number to the DeKalb County Courthouse is  (404) 371-2261.  You can also look up your case online through the DeKalb County’s Online Judicial System (OJS)

I called and confirmed that a lawsuit was filed against me but I haven’t received any paperwork.  What happens now?

When a lawsuit is filed, it is the Plaintiff’s responsibility to “serve” the lawsuit upon the Defendant.  This is accomplished using a “process server”, who can be  Sheriff or a private process server.  They usually come to your home and hand you the paperwork.  In some counties, Magistrate court cases are “served” in the mail without using a process server.  In some circumstances, there are grounds for the lawsuit to be dismissed if the Plaintiff does not serve the Defendant according to the court rules.

If I haven’t been served a lawsuit yet – Can’t I just avoid the process server and not answer my door?

Avoiding service of a lawsuit will not help your situation. In fact, if a process server attempts to serve you multiple times and is not successful in doing so, the plaintiff may try a different method, which is “service by publication”. This means they will run an ad in the local legal newspaper to notify you of the lawsuit. If you don’t read your local legal newspaper, which is the DeKalb Champion for DeKalb County, you may not know when this “service by publication” occurs. If they do this according to the rules of notice by publication, they will have successfully “served” you and can move forward with the proceedings whether you answer or not.   If you fail to answer, a default judgment can be entered against you, and the Plaintiff could then move to garnish wages or your bank account.

If you decide to retain us to defend you against the lawsuit, we can accept service of the lawsuit on your behalf.  This eliminates the stress and anxiety of wondering when you will be served.

What happens if I just ignore the lawsuit?

If you fail to file an Answer to the lawsuit in the 30 day period, you may face a default judgment being entered against you whether you owed the money or not. After a judgment is entered against you, the debt collector may garnish your wages or levy your bank account to collect on the judgment!

Can’t I just file an Answer to the lawsuit myself?  Why do I need a lawyer?

Remember, only approximately 3% of people even Answer these lawsuits at all.  Some of the ones who do answer them, do so pro se, which means they represent themselves and often times to their own peril.  The court room is an intimidating place and defendants who are representing themselves are at a huge disadvantage going up against debt collection law firms who do this work day in and day out.  If you hate dealing with debt collectors over the phone, imagine the difficulty of dealing with debt collectors, who are lawyers, in person and in setting completely foreign to you.  Often times, the debt collection lawyers are successful in finding every technicality of the legal system to trip you up and using intimidating tactics to get to you to cave in and pay up.

Our law firm handles the defense of debt collection lawsuits day in and day out.  Not to mention, Attorney Daniel DeWoskin is a trial attorney, which means he knows how to navigate the court room and has no hesitations in defending lawsuits all the way through trial. Having an experienced attorney to defend you in this matter also separates you from having to directly deal with the debt collectors or their lawyers.

I don’t have any money or a job, so why should I care if a default judgment is entered against me?

Even if you do not have any assets that can be seized right now, debt collectors often wait until you do get a job or assets to attempt to collect on that judgment, even many years later.  Not to mention, having a judgment being reported on your credit report can hurt your attempts to get a job or obtain credit for a house or a car.

Shouldnt I just file bankruptcy?

Filing bankruptcy can be a seriously devastating financial event. While there are some situations where bankruptcy is clearly the best choice, the majority of people facing third party debt collection lawsuits are not good candidates for bankruptcy. Why cause yourself further stress and hardship of bankruptcy?

I have received letters from the debt collector’s lawyers offering settlement plans. Shouldn’t I just call them and try to work something out?

Contacting them to work something out does not change the fact that a lawsuit has been filed against you and in most cases, you must file an Answer to that lawsuit within 30 days of being served. It is not likely that they will simply dismiss the lawsuit because you say you are willing to make payment arrangements.

Remember, the debt collector’s lawyers usually run debt collection firms of their own and it is likely that you will speak with a debt collector when you call them. Regardless, they are going to look out for the best interest of themselves and their client – not you. In fact, they may record your phone calls and use any statements you make, whether on the phone, in writing or email, against you in the pending lawsuit.

What if I am able to work something out with them? Isnt that a good thing?

If the debt is old and past the statue of limitations, making payments toward on an old debt or making renewed agreements to pay it can lengthen the amount of time you can be sued on the debt and lengthen the amount of time the derogatory mark can be reported on your credit report.  Not to mention, it usually does not stop subsequent debt collectors from buying the remaining balance and suing you later.

I’ve heard about settling debts for pennies on the dollar with these people.  Is that true?

Some people are able to settle their debts with third party debt collectors for a discount off of the total amount but it is usually with many strings attached. If you negotiate a settlement while a lawsuit is pending against you, the debt collector’s lawyer may have you sign a settlement agreement and a consent judgment. This basically means you are voluntarily accepting a judgment against you which does resolve the lawsuit but if you default on the new payment agreement, the judgment against you becomes enforceable. Since they already have a judgment, they can move to garnish wages and bank accounts.

While only advise from a competent tax professional can determine your individual circumstances, there is a chance that you will receive a 1099-C in the mail for the “forgiven” amount of the debt. This means you may be liable for paying income taxes on the amount of the debt that was forgiven.

What if I can’t afford an attorney?

Most of our clients find that our fees are a fraction of what they are being sued for. Once you add the debt your being sued for, the court costs, and any interest that they might be able to charge you after judgment, the affordability becomes clear. You have much more to lose by not hiring yourself a competent attorney to defend you in your debt collection lawsuit.

What if I don’t think the debt is mine?  Can’t I just ignore it?

You definitely don’t want to ignore a lawsuit because you aren’t sure if the debt is yours.  Unfortunately, being properly served with the suit and choosing not to answer the suit can cause you serious problems down the road.  Even if you think the debt is not yours, DONT ignore it!

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Author: Dan Dewoskin