Day in and day out I get them. Phone calls from all over this great country of ours from people just like you. People who fell behind on their bills and now have been sued. Despite being served with paperwork that clearly stated (likely in BIG, BOLD LETTERING, that they must respond to the lawsuit, they did…nothing.
I shouldn’t say nothing. I am sure they worried about it for a while, but then it seemed like too much to deal with and they just shut it out. There were a million reasons. “I don’t know what to do with it”, “I can’t afford a lawyer”, “I don’t owe it anyway”.
No matter your excuse, doing nothing may be the worst possible step. If you thought things couldn’t get any worse, just wait a little longer. But, it doesn’t have to be that way. The following are three reasons you shouldn’t ignore your collection lawsuit:
#1- Default Judgment
If you have been sued and you fail to submit a response to the lawsuit, the next likely step is that a default judgment will be entered against you. Once a default judgment has been entered that wimpy, worthless, credit card debt has now turned into a ‘roided out Junkyard Dog!
Without a judgment unsecured creditors like credit card debts or medical bills really can’t do much but be annoying. Sure they can call you on the phone and ding your credit, but they can’t take anything from you. That is until they get a judgment against you. Once a court signs off on a judgment you are then facing wage garnishments, bank garnishments, liens, and even risk having property taken from you.
Even if there is no question that you owe the debt, respond to the lawsuit. If anything it will buy you some time to work out settlement arrangements with the creditor and you will avoid a judgment altogether.
#2 – If You Fight, You May Just Win!
Back when I was in college I played football. I remember the first time I set foot on a college football field for practice. I was scared out of my mind. Everyone else seemed bigger, faster, and stronger. The one drill I dreaded the most was one-on-ones. This is where a single offensive lineman and a single defensive lineman line up and go head to head. As a new, inexperienced college football player I was afraid I was going to get killed.
But, after a few practices I found out that I wasn’t as bad as I thought – or maybe more correctly everyone else wasn’t as good as I thought they would be. And even when I was going up against some of the biggest, baddest dudes, I won some.
So it is with your lawsuit. Particularly if you have been sued by one of the debt buyers, you have a lot more going for you than you probably think you do. There is an assumption out there that the creditor is always right. You even see this sometimes in the legal system. But you know what? Often they are dead wrong.
I have had clients come into my office down-and-out because of the collection lawsuit filed against them. After going over what defenses they have they walk out of there changed people. Gather as much information as you can, and then stand up and fight. You might just win.
#3 – Filing an Answer Buys You Time and Leverage
The moment your judge signs the default judgment is the moment you have lost all leverage. Before judgment the lawsuit is nothing more than a paper with a bunch of allegations on it. After judgment, the creditor is armed with a piece of paper that can do serious harm to your paycheck.
The first thing that filing a response does is gives you time. In most states after the Answer to the lawsuit is filed there isn’t any significant deadlines for at least a month. This gives you time to talk to the creditor and see if some type of agreement can be reached.
The second thing that filing a response does is give you leverage. Time is money. And in litigation, time is expensive. If the creditor is paying their attorney hourly, then every hour they spend on the lawsuit is money out of their pocket. If the law firm is being paid on a contingency (meaning they don’t get paid unless they get money out of you), then the longer the lawsuit goes on the less profitable it is for the lawyers.
Do you see where I am heading with this? The longer the lawsuit the less money the creditor and its attorneys make. They want this to go to a default judgment or settle quickly. You can use this to your advantage when negotiating a settlement. They can settle quickly with you for $$ or they can pay their lawyers $$$ to continue to fight.
File a response, buy yourself some time, and put this tool in your pocket while you work out a settlement with the plaintiff. If you don’t respond, the creditor will have no incentive to take your lowball offer.