Debt lawsuits are indeed one of those issues with which many of the people of America have to wrestle. Chances are when you are reeling with your debts and collectors or creditors come and say, “If this isn’t done then we shall see you out.” That sounds very simple when you think and consider everything is at its easy level.
In this article, we will take you through the basics of debt lawsuits, what debt collectors hope you don’t know, and what you can do if you find yourself facing a lawsuit.
What is a Debt Lawsuit?
A debt lawsuit is a collection suit where either the creditor-debt collector or the actual creditor is suing for the money you owe, be it the credit card company, hospital, or bank. The complaint results in litigation where the court gives a judgment that orders you to pay the amount due as a judgment.
In Texas, debt collection laws are designed to protect consumers, but they also allow creditors and debt collectors the ability to pursue legal action to recover unpaid debts. If you get served papers for a debt lawsuit in Texas, you must take immediate action.
You will be served with a notice known as a summons by the creditor or debt collector who has filed with the court. In reality, What happens when you get served papers for debt in Texas is that you will need to file an answer with the court within 14 days of being served. If you don’t respond, the creditor can request a default judgment, which means the court will rule in their favor automatically.
How Debt Collectors Start A Lawsuit
Debt collectors can sue you if you hold up payment on your debt too long. Normally, however, they try calling you several times, sending in letters, or even using the services of a collection agency before doing that. If they fail, however, they could decide to file a case with the court instead.
Once you have filed a lawsuit, you are served with a summons, which informs you that the court is being asked to assist the creditor in collecting their debt. At this point, it is now crucial to act in responding to the summons. If not done, the case may default and be lost.
What Collectors Don’t Want You to Know
Debt collectors rely on your fear and confusion to collect right away from you. Several things they would like for you not to know might also keep them from reaching you, maybe even having a case dismissed outright.
1. They Do Not Always Have the Right to Sue You
Many times, the debt collectors are not permitted to take you to court. For instance, if the time for taking you to court according to the statute of limitation for the debt has elapsed, they are not allowed to drag you to the court.
In most states and forms of debt, the duration is normally 3 to 6 years. If the debt is nearly very old, then perhaps the collector will not have any legal right over it.
Educate yourself on the debt length and your state’s statute of limitations so you know how much time is available. If the latter has expired, the collector is likely attempting to bully you into taking an offer they are legally incapable of collecting.
2. They Lack Documentation All the Time
A debt collector must be able to prove you owe the money they’re collecting. It often requires the production of a copy of the original loan contract or agreement and of all payments that have been made. Often they cannot produce such documents.
In case they can’t prove that you owe money, or even cannot produce originals, the case may be dismissed.
3. You Can Sue on the Debt
You can defend if sued for a debt you do not owe or the amount being claimed is incorrect. Such rights can be taken by replying to the filed lawsuit, requesting proof of the debt, and also filing a counterclaim if necessary.
Many people do not know they have this right and end up paying debt they do not owe, just to avoid the hassle of going to court.
4. You Can Settle the Case
Debt collectors would normally negotiate with the debtor before resorting to a court case. Sometimes, they settle for less money in order not to pursue litigation to collect the debt. This is another alternative to skipping the case since it will bring down the overall amount owed as well as avoid judgment.
Collectors usually want to collect at least something, rather than nothing. So, if you can afford to make a smaller payment, you might want to try contacting them and negotiating.
5. You Have the Right to Represent Yourself
If you can’t afford to hire an attorney, you may represent yourself. Although it can be intimidating, many people have successfully defended themselves against a debt lawsuit. Defending yourself in court means collecting all the papers and evidence to prove your case. If you need representation but cannot afford to hire an attorney, you might seek free or low-cost representation from a service in your area.
What If You Lose the Lawsuit?
If you do not get a favorable judgment, judgment will be given against you. That means you have to pay what is owed to you, but by this time you also will have incurred interest, probably court fees, and possibly a substantial attorney’s fee.
This may also leave the creditor or debt collector to collect the money by, for example, garnishing your wages or placing a lien on your property, if you do not pay back the debt. But losing doesn’t mean all hope is lost. You may still be able to negotiate a payment plan or settlement arrangement that can make the debt easier to pay in your budget.
What to Do if You’re Being Sued
If you get a summons for a debt lawsuit, calm down. Here are the steps you should take to protect yourself:
- Answer the Summons: You should address the lawsuit. Failure to react to the summons may result in a default judgment against you; this means losing the case since you have never had a chance to defend your case.
- Review the Debt: Review the documentation on the debt you are being sued on. Look to see if the total amount due is correct and that the creditor or collector has the paper trail to prove you owe them.
- Reach Out to the Creditor or Debt Collector: If you know the debt is legal but do not have the money to pay all of it at once, you can communicate with the creditor or collector.
- Seek Professional Help: If you are still confused about what to do, you may even look for professional legal help. Most attorneys will give you free consultation and a few of them might take your case at a lower fee or even for a free contingency basis.
- Court Hearing: If the case goes to court then appear during the hearing. The litigant who fails to appear may end up getting a default judgment against them.
Conclusion
Even if the debt lawsuit may be a frightening experience, the knowledge of what debt collectors would like you not to know is what will get you ahead of the game to defend yourself better. Know your rights and gather evidence that will help you fight against such unfair practices and negotiate a better outcome.
If you’re sued for debt, take a deep breath, calm down, and consider all your options. The bottom line is not to ignore the situation but to deal with it head-on. This way, you can take control of your financial future and avoid the stress of unresolved debt.
FAQs
Can a debt collector take my car or house?
A debt collector can take only that which a court has ordered him to through a lawsuit, though huge debts usually have that reserved for them.
Is the debt legitimate?
You may demand that the collector produce evidence of legitimacy and entitlement to collect the debt.
What will happen if I do not pay my debt?
You can still bargain with your creditor or collector to get a real deal that will significantly lower the amount of money this person owes you.
