This post may contain affiliate links, meaning I may earn a small commission at no cost to you if you make a purchase through the links.
When your situation becomes worse, you may encounter debt collectors. The fact that the creditor is demanding you pay immediately might cause your fear of losing your job.
In this blog post, you will learn what happens when you get debt collection lawsuits so that you can be better prepared to deal with the situation.
What Happens When You Get Served Papers For Debt?
As mentioned earlier, being served papers means that a creditor is demanding you pay your debt immediately. If you don’t take action immediately, the collector may try to garnish your wages or take your possessions.
If you are served papers for debt, it’s important to take action immediately. You can try to negotiate with the creditor or consult with an attorney.
If you ignore the papers, the creditor may take legal action against you.
What Is A Debt Collection Lawsuit?
A debt collection lawsuit is a legal case filed by a creditor to collect a debt. The creditor will usually file the lawsuit if you have failed to make payments on your debt.
If the court rules in favor of the creditor, they can do wage garnishment or take your possessions. The creditor may also be able to collect interest and fees on the debt.
If you are served papers for a debt collection lawsuit, you should consult with an attorney. An attorney can help you understand your rights and options.
What Are Your Rights?
If you are being sued by a creditor, you have certain rights. For example, you have the right to:
– Be served with notice of the lawsuit.
– Have an attorney represent you in court.
– Request a postponement of the court date if you need more time to prepare.
– Present evidence and witnesses in your defense.
– File counterclaims against the creditor.
Who Is The Debt Collector?
The debt collector is the person or company that is trying to collect the unpaid debt from you. The debt collector may be the original creditor or a third-party collection agency.
If you are being contacted by a debt collector, you have certain rights under the Fair Debt Collection Practices Act.
Why Have I Been Served?
There are a few reasons why you might be served papers for debt. One reason is that you failed to make payments on your debt. Another reason is that you made a partial payment or made a payment late.
When you are “served,” the complaint will say why the creditor is suing you. The creditor wants the money you owe, plus interest and maybe attorney fees and court costs.
The summons also informs you about when and how you can file a formal response in court and the date of your court hearing.
What To Do If You Have A Debt Collector Threatening To Serve Papers?
When a debt collector threatens to serve papers, they may be violating the Fair Debt Collection Practices Act.
This means that they cannot lie and say they’ll take legal action against you unless that’s true.
Additionally, debt collectors cannot take or threaten to take your property if they can’t do it legally.
This usually refers to debt that is past the statute of limitations in your state. Technically, they can still attempt to collect a time-barred debt, but they can’t file a lawsuit.
If the debt collection agency threatens you with a lawsuit, they may be just trying to scare you into paying a debt you may not even owe.
It is important to know your rights as a consumer and to understand what the debt collector can and cannot do.
If you feel like you are being harassed or treated unfairly, you may have grounds to file a complaint.
What Should I Do First After Being Served?
The minute the debt lawsuit papers are delivered, the clock ticks, so there is only a brief time left until things get even worse.
However, after the papers were served, it’s best not to get upset. Focus on the things you should do. The worst thing that you can do is to ignore it.
In most states, you have 20 to 30 days from when you got “served” to respond. However, if the debt case was filed in a Texas JP/Justice Court, you only have 14 days to respond after the summons is served.
Review Your Own Records
When you get papers for debt, it is important to look at your records and what the debt collectors send you. This includes the debt validation letter. Check to see if you are legally liable.
This will help you determine if the debt is accurate and if you actually owe it. If the debt has been sold, there might be some errors. The name or amount of debt might be incorrect.
You should also find out if the statute of limitations has passed. This is the time when you can’t legally be sued. However, collectors might still try to sue you.
This is called time-barred debt. It is still a debt and does not go away until you pay it off. It will remain in your credit history.
Contact A Lawyer
If you are served with court papers, it is a good idea to contact a lawyer to see if you have a defense. If you choose, you have the right to appear in court by yourself or with a lawyer to tell your side of the story.
File Your Response Immediately
When you get served papers for debt, you may want to consider hiring an attorney. They can point out defenses you may not have been aware of and help you write a more complete response.
If you go to the hearing with an attorney, the collector may not be able to verify the debt, and it could get dismissed. You may have to pay a fee to file your response, but fee waivers may be available if you can’t afford them.
You have three options when answering court summons for debt: admit, deny, or lack of knowledge.
If you choose to admit to an allegation, make sure you agree with it completely. You can also include affirmative defenses with your answer.
After you complete your answer, you need to file it at the clerk of court’s office and mail a copy to the plaintiff’s attorney. All of this must be done before the deadline.
If you missed your chance to respond in a timely manner, the debt collector could file a default judgment. You cannot negotiate debt with the government.
Show Up In Court
After filing your answer, you will be served with a notice of the lawsuit, including the date and time of your court appearance.
If you do not show up to court, the judge can issue a default judgment against you, which means that you will automatically lose the case.
However, if you do show up to court, you will have the opportunity to present your defenses to the judge.
If the judge finds that you do owe the debt, they will enter a judgment against you for the amount of the debt, plus interest and court costs.
The judgment will become a lien on your property, which means that the creditors can try to collect the debt by taking your property.
In some cases, the creditors may also try wage garnishment or your bank account. If you have any questions about what happens when you get served papers for debt, you should speak to an experienced attorney.
Options After Being Served
It is usually best to try and settle a debt outside of court. This way, everyone can save time, money, and effort. This is especially true if the debt is small.
If you found that you truly owe money, here are some options you can do.
Solve the debt by paying less than the full amount.
You can do this by negotiating with the creditor before the trial.
Many collections agencies do not want to spend time trying to collect a debt through trial. They would rather settle for a lower amount.
If you are willing to pay a lump sum, you can try to negotiate a settlement for less than what you actually owe.
You should get the agreement in writing before you make any payments. The agreement should state the amount you will pay and that the creditor will consider the debt paid in full after receiving your payment.
Settle the lawsuit by agreeing to pay it in full over time
If you cannot pay the debt in full, you can try to work out a repayment plan with the creditor. You should get the agreement in writing before you make any payments.
The agreement should state your payment plan amount and how long you will make the payments. It should also state that the creditor will not take any further legal action against you as long as you make the monthly payments.
Some creditors may be willing to waive some of the interest or fees if you agree to a repayment plan. You can also try to negotiate a lower monthly payment.
If you make a repayment plan, make sure you can afford the payments. If you miss a payment, the creditor can take legal action against you again.
Filing Bankruptcy For Collection Lawsuits
If the debt is too much for you to handle, you can try to file for bankruptcy. This will wipe out most of your debts and allow you to start fresh. However, it will also stay on your credit report for seven to ten years.
When a consumer files for bankruptcy, all pending debt collection efforts by the creditor and debt collector will stop. This automatic suspension usually lasts until bankruptcy proceedings are settled.
If you are considering filing for bankruptcy, you should seek legal advice from an experienced bankruptcy attorney.
If you’re not able to come to an agreement with your creditors or feel like you can’t negotiate with them yourself, consider getting help from a debt settlement company.
On the other hand, if you’re sued for a debt you don’t recognize or can’t prove that you owe, you may be able to have the case dismissed by asking the creditor to provide adequate documentation during the hearing.
You may also want to check your credit report for signs of identity theft.
Is Not Paying The Debt An Option?
Not paying your debt is only an option if you are judgment proof. In other words, even if the creditor gets a judgment against you, they will not be able to collect the debt.
For example, if you do not have any assets or your income is low enough that the creditors cannot garnish your wages, you may be judgment proof.
Each state is different, but some types of income can not be garnished. This type of income includes Social Security and Medicare Supplemental Security income benefits, disability payments, retirement funds, child support, alimony, state assistance, and unemployment benefit.
Conclusion On When You Get “Served” For Debt
When you get served papers for debt, it can be a scary experience. But it is important to remember that you have options. You should always try to settle the debt outside of court.
But if you cannot do that, you can still try to negotiate a repayment plan or file for bankruptcy. If you have any questions about your options, you should speak to an experienced attorney.
If you found this article helpful, make sure to check out more debt payment tips below.
Debt Related Articles:
- Best Debt Payment Strategies To Be Debt-Free
- How to Snowball Your Debt To Be Debt-Free
- How to Pay off over $15K In Less Than A Year
- Use Debt Snowball Worksheet To Pay Off Debt Quickly
- How To Stay Motivated To Pay Off Debt