What to do if I’ve been served papers for a debt?
There’s a myth that as long as someone avoids a process server, they’re also avoiding a lawsuit. The truth is, it’s impossible to avoid being served forever, as process servers will eventually find the defendant at work or request permission to leave the documents at the door. This will merely delay lawsuit proceedings, and collateral damage, like loss of reputation at work is always a possibility. Hiding from the lawsuit isn’t a sustainable strategy, then, and the lawsuit will have to be confronted if the defendant is going to have any chance of attaining a favorable outcome.
A formal notice of lawsuit proceedings is referred to as the complaint and summons, though in Texas, the terms are petition and citation. The complaint outlines the case details, including how much is owed and the account history. The summons lists important court dates and details, including the deadline on any answer and which court is managing the case.
It’s normal for people to freeze up when they see these papers in their hands. For many, the threat of a lawsuit is either something that has weighed on their mind for a long time, or something that has come from nowhere. In both instances, the realization that the lawsuit is real and going to happen comes with powerful emotions. Don’t let those emotions dictate what happens next.
Once the initial shock has worn off, the defendant must be ready to answer the complaint. This is always the first, and most important, step in establishing an adequate defense.
Provide an answer
Make no mistake, the debt collector wants nothing more than for the defendant to avoid answering the complaint. They want the defendant to ignore the lawsuit entirely, because this means they win by default. Lawsuits aren’t canceled because the defendant doesn’t show up. They are merely resolved in the debt collector’s favor. This outcome has severe consequences for the defendant, as a default judgment opens up additional tools in pursuing debt, including wage garnishment or asset repossession. Further, the debt collector will notify credit institutions that the default exists, negatively affecting the defendant’s credit score. There is no easy way out once a default judgment is rendered, so avoid it at all costs.
The only way to avoid this is by providing an answer, and how the defendant goes about this depends on the case’s details. If the defendant owes the debt collector money and they have no particular defense backing their side up, a couple sentences denying the plaintiff’s claims in general terms will often be enough to immediately improve the defendant’s position. That’s because, at this point, a trial or mediation is a certainty. This requires the debt collector to invest time and money in pursuing the claim, and many are open to negotiating a settlement in order to avoid spending additional assets on the claim.
However, if the defendant has reason to believe that the lawsuit is legally invalid in some way, then this should be asserted in the answer. To get the court to consider a defense, it must be asserted from the outset, and a debt defense attorney will ensure that their client’s answer makes it clear. If the answer is powerful enough, it can intimidate the debt collector into offering a favorable settlement, or may encourage them to drop the claim entirely.
Once the answer is provided, which must be done within 20 days, the debt defense attorney will quickly gather all documentation and evidence for their client’s defense. There are usually several defensive options available, including:
- Statute of limitations – Almost all debts are time-barred, in that they can only be the subject of a lawsuit for so long. Eventually, after several years, the debt passes through the statute of limitations and legal action is rejected. This won’t stop debt collectors from trying, though, in the hopes that they win a default judgment without exposing their case’s weakness. A debt defense attorney will review the case details closely to determine when the statute of limitations started, if it has been altered in some way, and if it is relevant to the case. If it is, the lawsuit will likely come to an immediate end in the defendant’s favor.
- Challenging the debt collector’s legal authority to sue – Debt buyers and scavengers like to engage in legal action aggressively, because they only need to win a few to turn a tidy profit. But in doing so, debt buyers often pursue legal action even when they don’t have the authority to do so. When a debt buyer purchases bulk debt, they must receive all relevant information from the account, as well as any documentation that demonstrates their authority to collect on the debt. This is something that debt buyers often neglect as they often don’t have the time to go through every single account they purchase.
- Forcing the debt collector to provide a mountain of documentation – Defendants have a right to proof. Proof of account ownership, proof of payment history, proof of account details that identify the defendant, proof of contract terms – proof of everything. And it is up to the debt collector to provide this proof. Sometimes, the debt collector comes well prepared and can produce this information readily. More often, the debt collector has to chase down the information, and a debt defense attorney can have the plaintiff deal with a withering discovery phase. This is perfectly acceptable because, again, the defendant has the right to this. But it may not be worth it to the debt collector to play seek and find with all of this documentation, and it’s common for lawsuits to dissolve into nothing because, eventually, the plaintiff stops responding and turns its attention elsewhere.
There are options available in nearly every lawsuit, even when the situation seems dire. It all begins with a proper response to being served lawsuit papers. A debt defense attorney knows how to best formulate this response and defend their client.