A countless number of Americans are pursued by debt collectors every day. Not only can they have a negative effect on your credit score, but debt collectors often have the power to file a lawsuit against you. If you're already dealing with an overwhelming amount of debt, adding a lawsuit into the equation only makes matters worse. Protecting yourself in this type of situation begins with you responding to the lawsuit, not ignoring it.
Default Judgment
Don't make the mistake of ignoring any compliant or summons you get notifying you of the pending lawsuit. When you fail to respond you are basically silently agreeing to all the claims being brought up against you in the lawsuit. Once this happens the court may file a default judgement against you.
With a default judgement, the petitioner basically wins their claim uncontested. In this case, the debt collector could be awarded whatever amount they are requesting plus any court and attorney fees they have incurred. The collector may also be offered the option to obtain repayment based on their terms, such as a direct withdrawal from your bank account or wage garnishment.
Denial of Liability
It's also important that you respond to a lawsuit from a debt collector so that you have the option to file a denial of liability. The reality is that humans make errors. When it comes to a lawsuit this can actually work in your favor. When you first receive the claim from the debt collector, make certain you are inspecting the details. Look for an issues with the claim, such as an inaccurate amount of money they say you owe or even an incorrect date of debt accrual.
Any inconsistencies afford you the option of filing a denial of liability. A denial of liability is basically a signal to the debt collector that you plan to make them work. Rather than investing time and money into a long, drawn-out case with you, debt collectors are often willing to make a settlement offer at this point. Settlement offers can often save you a considerable amount of money.
If you are facing a lawsuit from a debt collector, it's a good idea to work alongside a debt defense attorney. An attorney will help you review the claims of the lawsuit for accuracy and provide you with assistance on determining the best way to respond and proceed with your case in order to protect your finances.
