If you are being sued by a creditor, you need to know what to do. The day finally came that you hoped never would. You receive a summons to appear in court for old credit card debt that went unpaid years ago. Perhaps you forgot about it, or you hoped that it would just go away, but it did not. Creditors and collection agencies have long memories and always have a way of catching up to you.
What To Do If You Receive A Summons
By the time you receive a summons to appear in court, your creditor will not go easy on you. Their goal is to sue and win. They will go for a judgment and try to garnish your wages for repayment. Even worse, not only do you have to repay the original debt but you also have to pay attorneys fees and any interest that has accrued. You should always try to settle with your creditors before it gets this far. Most creditors and collection agencies are happy to settle with you.
The Creditor Would Rather Settle Than Go To Court
Creditors do not want to take you to court, despite what they might have you believe. Taking you to court is expensive and even if they win it can be difficult for them to collect from you. If your wages are garnished and you quit your job or get a new one, they have to start all over again to get the garnishment in place. It is time consuming and expensive for them to do this. For this reason they really would rather settle with you out of court.
What To Do First If You Get Sued By A Creditor
The first thing you should do is find an attorney and get yourself some legal advice. 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 the long contract with all the fine print that you got with your credit card application. You need to get a copy of it and read the entire thing. Getting a copy of it could be difficult. 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 what evidence the other side is going to present. You may file a request for Production of Documents before you have to appear in court, but only if the court you are going to is governed by Rules of Civil Procedure. If your court is a non-rule court you can request a copy from the collection lawyer. Write your request in a professional, polite manner and send it by certified mail. If you do not get a copy the judge may be more lenient with you or possibly give you a continuance.
How To 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. What is 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 state’s 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 expired, they would have no more legal claim against you to collect the debt.
