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What Happens When You Get Served Papers for Debt?

What Happens When You Get Served Papers for Debt?

When you owe more than you can pay, the burden is not just financial. It can interfere with your mental health, prevent you from taking care of your loved ones, and keep you from living the life you deserve.

The last thing you should do, however, is wait it out and hope that your luck changes for the better. As soon as you fall behind on payments, your financial crisis suddenly becomes time-sensitive. Your creditors—depending on whether or not your debt is secured—may take your property through foreclosure or repossession. Alternatively, they could file a lawsuit to obtain a judgment against you.

The following is a brief discussion about debt collection lawsuits and what to do if you get served papers for debt. As always, please do not hesitate to get in touch with us if you need professional support.

Whatever You Do, Don’t Ignore the Lawsuit

When a creditor or debt collector takes you to court, the judge will assess the situation and issue a ruling. You will have the opportunity to defend yourself and potentially secure a ruling in your favor—but this can only happen if you respond to the lawsuit in a timely manner. If you ignore it or simply fail to show up, the court will almost certainly rule in the plaintiff’s favor.

If the creditor or debt collector secures a judgment against you, they will gain additional debt collection tools. They may, for example, be able to:

  • Garnish your wages
  • Levy (freeze) your bank account
  • Place a lien on your property
  • Add their court fees, attorney’s fees, and interest to your total balance

If you choose to fight the lawsuit instead, you will have a much greater likelihood of avoiding the above consequences. Depending on the circumstances, you might even be able to eliminate your liability for the debt.

Verifying the Debt

Sometimes, creditors or debt collectors will sue you over debt that you are not legally obligated to pay.

For this reason, the first thing you should do if you are served papers for debt is to make sure you are actually liable for the amount they are collecting.

For example, the debt might be time-barred (i.e. past the statute of limitations). The statute of limitations is different in every state, but the countdown always begins when you miss a payment. Once a certain number of years passes after you miss the payment, it is considered time-barred, and the debt collector can no longer take you to court.

Some debt collectors will simply come after the wrong consumers because they bought debt from the original creditor without collecting sufficient details about the borrower. Even if you do owe the debt, collectors are sometimes unable to produce proof of your liability.

In general, debt collectors are prone to making mistakes or simply ignoring consumers’ rights. This is why you must act if you are sued over debt, as you might not need to pay anything at all, and a judgment against you could permanently prevent you from exposing the debt collector’s mistakes or consumer rights violations.

Debt-Relief Strategies

If the debt is yours and it is within the statute of limitations, you still have options. For example, your attorney might be able to negotiate with the debt collector before the hearing, convincing them to adjust the terms of what you owe instead of going through with the lawsuit.

Alternatively, you may consider filing for bankruptcy. Bankruptcy triggers a court order called the automatic stay, which keeps creditors and debt collectors from pursuing your debt in any way until the end of your case. As a result, bankruptcy will prevent debt collection lawsuits and even freeze any lawsuits that have already begun.

Discuss All Options with Our Team

At Bach Law Offices, our attorneys have 40+ years of experience helping clients overcome severe financial hardship. Whether we help you prove that you are not liable for debt, negotiate with debt collectors and creditors, file bankruptcy, or utilize another debt-relief strategy, you can trust us to only recommend what we believe is best for your future.

Give us a call at (847) 448-0025 or contact us online to get started on your case today.

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