What do you do if you get sued by a creditor? The day finally came and you hoped that it never would. You went to your mailbox and there was a summons for you to appear in court for an old credit card that you did not pay years ago. You hoped that it would go away but it did not. The past always has a way of catching up with you and so do creditors and collection agencies.
What Do I Do If I Get A Summons?
By the time you receive a summons to appear in court, your creditor is not going to play nice with you anymore. Their goal is to sue and win. They will go for a judgment and try to garnish your wages for repayment. It gets even worse than this, not only do you have to repay the original debt but you have to pay attorneys fees, interest and the original principal back. It is always best to try and settle with them before you have to go this far. Most creditors and collection agencies are happy to settle with you.
You Creditor Does Not Want To Take You To Court
Contrary to what the creditor would have you believe, they really do not want to take you to court. For one taking you to court is expensive and even if they win it can be difficult for them to collect from you. If you are garnished and quit your job or get a new one, they have to start tracking you down all over again to get the garnishment in place. It is time intensive and expensive for them to do this. For this reason they really would rather settle something with you.
What Should I Do First If I Am Sued By A Creditor?
The first thing you should do is get in touch with an attorney to get yourself some legal help. The second thing you should do is read the original credit card contract. Most debt collection law suits are based on aged credit card debt and breach of contract. This means that you are being sued for breaking your agreement to repay the debt.
The key element to this kind of suit is the actual written contract. This is that long thing you got with your credit card application that you needed a microscope to read. You need to get a copy of it and read the whole thing. Getting a copy of it could be tough. If your creditor is taking you to small claims court, you may not have the right of formal discovery.
Formal discovery is a rule that attorneys use to learn about the other side’s case and what evidence they are going to present. If the court you are going to is governed by Rules of Civil Procedure, you may then file a request for Production of Documents before you have to appear in court.
If your court is a non-rule court you can request a copy from the collection lawyer. You need to be nice when making the request from them. Do it in writing and send it certified mail. This way if you do not get a copy the judge may be more lenient with you or possibly give you a continuance.
How Can I Beat A Creditor Lawsuit?
Once you get a copy of the legal agreement that you signed with your creditor you need to look for a couple of things. You need to read the contract and see what the maximum amount of interest you are allowed to be charged under the agreement. Has the collection agency exceeded this amount by adding costs and collection fees on the balance? Does the amount that you are being sued for go over your states usury statute? Does the contract require the case to be brought in a certain jurisdiction or state? If so you may be able to have the case thrown out.
If the case has been filed in the wrong jurisdiction, a delay in moving it could push the creditor past the statute of limitations in trying to collect on the debt. Therefore based on time expiring they would have no more legal claim against you to collect the debt.
More information on negotiating with a debt collection company.
