The overwhelming majority of families that are sued by debt collectors either don’t get proper notice or simply ignore it. This isn’t the first (or even second) time I have written about this. Every now and again – usually after I have met with several families that are now facing severe financial difficulty because they ignored the lawsuit – I feel the need to send out a reminder that you must take action.
Ignoring a debt collection lawsuit will result in things becoming much worse, including things like wage garnishment, bank levy, and further damage to your credit score.
Nearly 95% of Consumers Fail to File an Answer to their Debt Collection Lawsuit
In a recent study it was found that nearly 95% of lawsuits filed by junk debt buyers like Midland Funding, Midland Credit Management, Cavalry SPV, and Portfolio Recovery Associates end in a default judgment. ((The Legal Aid Society, Debt Deception (May 2010)))
A default judgment is entered after a person is served with a copy of the summons and complaint and then fails to file a written Answer to the allegations in the debt buyer’s complaint with the appropriate court.
If you don’t file a response to the lawsuit then here in Arizona the courts almost always give the debt buyer everything that they are seeking. You end up with a default judgment for the full amount and now the debt buyer is in the position to wreck havoc on your financial life.
Filing an Answer is Simple and Will Save You Both Money and Grief
Almost every day that I am at work I sit down with families who are dealing with a default judgment because they failed to take action. Once the default judgment is entered your options become very limited. You will have lost almost all of the leverage you had in debt settlement negotiations and many times are left with unattractive options like bankruptcy.
And the heartbreaking thing is it doesn’t need to be this way. Filing an Answer is easy and will save you all kinds of grief. A big reason many do not file an Answer is because they simply don’t know what the document is. The number one mistake I see when consumers file their Answer on their own is that they use the Answer as their time to tell their side of the story. They go into all kinds of details about job loss, health issues, and countless other reasons as to why they fell behind on their debts.
The Answer is not your time to tell your side of the story.
All the court needs you to do is state whether you admit or deny the allegations found in the debt buyer’s complaint. And in most cases you can honestly deny most of the debt buyer’s allegations because at the end of the day the one thing all parties can agree on is that the debt buyer didn’t loan you any money and you didn’t agree to pay them any money so why should they be entitled to a judgment against you.
Until the debt buyer proves in court that it is entitled to payment, you can deny all of its allegations.
Not only will filing an Answer help you avoid a default judgment, it opens up several options on how to deal with the underlying debt. You will be in a better situation to settle the account for a lower amount or you can fight the case and make the debt buyer prove that it is both the owner and that you money on the account.
If you fail to take action you put yourself in a position where the debt buyer has all of the power. And that won’t end well for you.
Find Out How Easy it is To File an Answer
If you have been served with a debt collection lawsuit let me show you how easy it is to file an Answer with the court and why you should fight back against abusive creditors. I have handled nearly 300 trials/arbitrations against debt buyers and know the defenses that work. I offer a free consultation and would be happy to meet with you and discuss your options on how to deal with your debt problem.
I can be reached at (480) 420-4028 or via email at firstname.lastname@example.org.