Debt Collection LawsuitAre you facing a debt collection lawsuit? You are reading the second part of our article: Being Sued. If you did not read the first part, Being Sued, please read it before continuing. What would a default judgment mean to you? It would mean that you would automatically lose the debt collection lawsuit without ever having had a chance to defend yourself by telling the judge why you cannot pay your debt, why you believe that you do not owe the debt, etc. It also means that you would be legally obligated to pay the plaintiff the judgment, which is likely to be not only the amount of the debt you were sued for, but also interest and penalties, as well as the plaintiff’s court costs and attorney fees. Also, once the plaintiff has been awarded the judgment, it will be legally entitled to try to collect that money from you by any method legally available in your state, which could include seizing the funds in your bank account, garnishing your wages, etc. If the debt collection lawsuit goes forward, you should prepare for it by pulling together all of your records related to the debt you are being sued for, including relevant contracts, records of any payments you made on the debt, copies of any correspondence between you and the debt collector or creditor, and so on. Organize the information chronologically and put it in a file folder or binder so that it will be easy for you to access the information you need to prove your points during the court hearing. It’s also helpful to visit the court where your hearing will take place and to observe a couple cases. This way you’ll know ahead of time where the court is located and where you can park and you you’ll be more familiar with how the court works. Don’t be shy about sitting in the courtroom; it’s a public space and anyone who wants to can be there. Tip: Find out if you are being sued in small claims court. If you are, be sure to read our information about preparing for small claims court. If you believe that the creditor or debt collector has violated your legal rights under the federal Fair Debt Collection Practices Act (FDCPA) or a law in your state, bring a copy of that law with you and highlight the provisions that have been violated. Make sure that your records help prove the violation/s. For complete information about your rights under the FDCPA, purchase a copy of our e-book, Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights. Contact your local or state bar association to find out about any legal services in your area that may provide consumers with free advice or charge them on a sliding scale basis if you want help preparing for your day in court. Another option, if you can afford it, is to buy an hour or two of a consumer law attorney’s time. The attorney can educate you about your rights and give you some tips for how to present your case. If you want to meet with an attorney, shop around for one you can afford. Don’t be shy about asking up-front how much you will have to pay for the help that you need. If you are being sued for a substantial amount of money and the debt collection lawsuit will not be heard in small claims court and especially if you are being sued over a secured debt and you do not want to lose the asset that secures it -- your home or vehicle, for example -- get in touch with a consumer law attorney right away. Help! I can't afford an attorney...If your financial situation is dire and you cannot afford to defend yourself in a lawsuit, much less pay the court judgment if you lose, set up a free consultation with a bankruptcy attorney as quickly as possible. If you file for bankruptcy, the lawsuit will stop immediately and you’ll get time to figure out what to do about the debt under the protection of the bankruptcy court. Even if you do not file, the attorney can help you understand what the collector can and cannot do to collect from you if it wins its case.
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