• I don’t recognize the name of the company that’s suing me – Who are they?
Many large creditors don’t bother attempting to sue you to collect what’s owed. They often sell or assign your debt to smaller organizations that only collect debts. In some instances companies try to collect debts that they have no right to enforce, so it’s important to have your case analyzed by an attorney.
• Do I have to file an answer or appear at the date and time stated?
In a debt collection matter, if you don’t file an answer or appear, the court will render a default judgment against you. This is essentially an order from the judge stating that you’ve lost the suit and the debt collector can now take your property to satisfy the debt. While in most instances you don’t need to appear or file an answer, doing nothing is generally not the best choice for the reasons set out below.
• What can the creditor do to me if they win the lawsuit?
The most common debt collection method is garnishment of wages. Most creditors can take about 25% of your take-home pay for as long as it takes to satisfy the debt, attorneys’ fees, and accrued interest. Another popular tool is the seizure of money in your bank account. If you have had money taken from a bank account, contact an attorney right away, because there’s a chance you can get a big chunk of it back. Less common collection methods are liens against your home or car, attachment of tax refunds, and others.
• How do I file an answer?
Some creditors will include a blank answer form with the summons and complaint for you to fill out. If they haven’t, you can get a one from the court’s website, or contact my office for one. Take it to the clerk of court and pay a filing fee of about $100-150. It is strongly recommended that you consult with an attorney prior to drafting your answer because the debt companies will use your answer against you if it’s not prepared in a specific way.
• What’s the benefit from filing an answer?
The greatest benefit is that, sometimes – especially when the answer is prepared by an attorney – the debt collector just stops the lawsuit. They want to collect the most money with the least amount of work, so your answer indicates that you’re not going to let them walk right over you. Another benefit is that filing an answer will give you time to either negotiate a settlement, or get your bankruptcy ready.
• Should I fill out the “Optional Information Sheet” included with the summons and complaint?
No, the creditor will just use this information against you. However, if you’re presented with a similar list of questions that are not designated as optional or voluntary, you may need to answer and return them promptly or you could face a contempt of court citation and possible be arrested. These are called Interrogatories or Pattern Interrogatories. If you’re not sure which one needs to be returned, call my office for help.
• Should I still respond if I’m pretty sure that I do owe the debt?
In addition to the other benefits that come from filing an answer listed above, there are other reasons not to just give in if you’ve been sued. Even if you did incur the debt, it may be old enough that the creditor no longer has the right to sue you for it. Additionally, creditors will often try and collect additional fees and interest from you that they are not entitled to you. Because a judgment stays on your credit report for several years, it’s in your interest to resolve the matter before the end of the case.
• Can I stop a wage garnishment once it’s started?
Only a bankruptcy, loss of employment, or dramatic reduction in income can stop a garnishment.
• Can a bankruptcy help me?
It’s not too late to file bankruptcy even if you’ve been sued, have a judgment against you, or are being garnished. Bankruptcy can stop your creditors from calling you and seizing your money or property, wipe out debt, and give you a fresh start. The sooner you seek help from an experienced bankruptcy and debt resolution attorney, the better.