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Lawsuit Defense – Sued by a creditor or debt collector?

If you are sued in state or federal court, you must respond by filing an answer to the lawsuit. Failure to do so will result in what is called a default judgment against you. A default judgment is entered if someone is sued and does not answer the complaint. If an answer is not timely filed according to state and federal court rules, then that will mean a person loses automatically under the lawsuit. Once a person loses a lawsuit, either by default judgment for failing to answer or by fighting it and losing, then a judgment will enter against that person. With a judgment, a creditor is entitled to do several things in order to collect on its judgment debt. The creditor can garnish wages by taking up to 25% of the take home pay of an individual’s paycheck. The creditor can also garnish any bank accounts. Additionally, the creditor can attempt the seizure of both personal and real property. Finally, a creditor can record a judgment lien against the person in the county where he or she lives which will encumber the real estate that he or she owns for a long period of time. Additionally, this judgment lien will accrue interest at the rate of interest according to the lawsuit or at judgment rate of interest pursuant to state law.

Do You Have a Debt in Collection? You’re Not Alone

Recent studies show an alarming number of Americans have debts that have been turned over to collection agencies. CNN Money recently reported on a study conducted by the Urban Institute finding that one in three adults (roughly 77 million people) in the United States have a debt that has been turned over to a collection agency. The study looked at non-mortgage debt to include car loans, medical bills, credit cards and even child support payments. The amounts of these debts covered a range of $25.00 up to $125,000 with an average of about $5200.00. The article on CNN Money goes on to point out that  the problem literally touches all areas of the country with Nevada  showing the highest percentage of residents, about 47%,  with debts in collection and the highest  average amount of debt in collection at $7198.00. At the other end of the spectrum, North Dakota showed the lowest percentage of residents with debt in collections at around 19%.

The Huffington Post further reported on this study, noting that this study shows 35% of Americans have debt that has been reported or turned over to a collection agency.  This article goes on to discuss the collection industry reporting that about 140,000 people are employed by collection agencies and they recover about $50 billion every year. Many types of debt can end up in collection to include credit card bills, medical bills, delinquent gym memberships or cell phone and utility bills and even mortgages, student loans and automobile loans. The study also found that the majority of residents with debt in collections reside in the Southern and Western States.  Al.com posted an article breaking this down even further reporting that 4 in 10 or 40% of Alabamians have a debt in collection. A spokesperson for the Urban Institute said that stagnant incomes that are not keeping up with today’s inflation are a key factor to these delinquent debts.

If you are struggling with debt, whether or not you have reached the stage of harassing debt collections, our attorneys are available to help you. Please contact the Bond and Botes office nearest you to schedule a free initial consultation to discuss your current debt situation.

What to Do If You’re Being Sued

Our advice to anyone who is sued is to immediately obtain competent counsel and make sure an answer is timely filed to the complaint. Since the person being sued is the Defendant, it is up to the Plaintiff (the one bringing the lawsuit) to prove its case. As a result, it is our position that people have an absolute right to deny the allegations and demand that strict proof be provided by the creditor in order to be successful in its claim in court. With regard to someone being sued by a creditor, a debt collector, or a debt buyer, that entity must prove its case. Individuals have an absolute right to demand proof and can also raise a series of affirmative defenses in trying to defend the case. Examples of affirmative defenses and counterclaims may fall under the Fair Debt Collection Practices Act (FDCPA), Truth in Lending Act (TILA), Fair Credit Billing Act (FCBA), Telephone Consumer Protection Act (TCPA), the debt has been paid, the person does not owe the debt, that the debt itself is beyond the statute of limitations, that the debt collector or debt buyer does not have the right to bring the case, etc.

You should seek help immediately upon receiving the suit. Do not wait. If you would like to contact one of our attorneys to discuss your situation, we offer a free consultation visit. We would be happy to explore all of your defenses and options with you with regard to the lawsuit.

Related Posts:

How Does Bankruptcy Protect Me From Creditors?

Defenses to a Preferential Transfer Suit

Are You Being Sued or Harassed By a Debt Buyer?

Debt Buyer Lawsuits

What Can You Do If a Debt Collector or Creditor is Taking Money From Your Bank Account

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Bankruptcy - We Wrote the Book on It - written by Ronald C. Sykstus and the Bond and Botes team of lawyers who have over 150 years of collective experience in this area of law. Retail price of this book is $14.95 and available at Amazon. A free copy of the book is provided to all prospective clients who retain us for representation. If you would prefer to do your own initial research, this book will serve as a perfect first step for someone who is concerned and worried about their debt situation and wants to know all of their options in the privacy of their home prior to discussing their situation with a bankruptcy lawyer or anyone else.

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