If You’ve Been Sued For An Unpaid Debt. . . Part One

If You’ve Been Sued For An Unpaid Debt. . . Part One

In sheer number, there is likely no debt more common than credit card debt. Not everyone may have had a car, mortgage, or student loan, but they have likely had a credit card. It is not uncommon for these debts to go unpaid and even ignored, which is never a good course of action if it can be avoided. In this situation, and this doesn’t just apply to credit card debt, a creditor may file a lawsuit based on an open account and/or breach of contract.

No consumer with credit card debt should ever ignore a creditor’s collection attempts related to unpaid debt. The consequence is that the creditor will attempt to collect the debt by filing a civil lawsuit. Anyone owing a debt will discover that they must defend a lawsuit when they are served with a summons and complaint where they are named as a defendant.

Once served with a lawsuit, a defendant may expect that it will be more difficult to resolve the situation. Although it is possible to contact a creditor, now a plaintiff as well, and still resolve the case after it is filed and before it moves forward, this typically requires negotiation of some settlement better than the creditor’s current standing, which is as a plaintiff in a lawsuit with an excellent chance of success on the merits. This may require a solution where the defendant repays some portion of the debt to the plaintiff very soon.

Banks and other financial institutions typically have vast resources, including collection agents, and legal resources, including collection attorneys, located throughout the United States to pursue unpaid debts. The collection of delinquent debts is part of doing business.

A debt collection defense attorney is valuable in helping any consumer defend a debt collection lawsuit and assert any applicable defenses while providing expertise and guidance throughout any court proceedings and settlement negotiations.

After all, despite a creditor having an intimidating array of legal resources, it must nevertheless prove that the defendant is the legal obligor of the debt and owes the alleged balance. It is not uncommon for a creditor to be missing some or all of the records related to a case, especially if the creditor is not the original lender and has purchased or been assigned the debt.

Another valid defense that is common is for the statute of limitations to have expired or “run” on the debt. Another possibility is that the debt was assigned and the original creditor failed to credit payments that were made. A debt collection defense attorney can help a defendant assert all defenses that are legally available in a timely filed answer.

Once served with a lawsuit, the defendant/debtor is on the clock with limited time to respond to the summons. A defendant only has 20 to 30 days (depending on the type of service) to prepare and file an answer responding to the creditor’s complaint. Any defendant who fails to file an answer to a complaint is making a costly and unwise decision. In this situation, a creditor may obtain a judgment by default, which equates to a clear victory for the creditor.

And then things can worsen for a defendant. A creditor who obtains a judgment as a plaintiff becomes a judgment creditor and the defendant becomes a judgment debtor. In this situation, a judgment creditor may try to collect by “executing” on the judgment in various ways. It may garnish wages, bank accounts, as well as file a judgment lien on or levy property.

Credit card companies rarely fail to take action on the unpaid accounts of cardholders. At some point, they will file a civil lawsuit to obtain a judgment for an obligation that is long past due. Once a creditor serves a complaint for past due money on a defendant, the latter only has 20 to 30 days to prepare and file a response.

Many bankruptcy debtors have a choice between filing a Chapter 7 bankruptcy case and Chapter 13 bankruptcy case. There are many differences between the two chapters. An experienced Morrison Law Group attorney can help you determine which is best for your financial situation. Call 801.456.9933 today to schedule a FREE consultation and discuss your complete set of options. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.

If You’ve Been Sued For An Unpaid Debt. . . Part One

Theron Morrison

Theron Morrison

Utah’s top bankruptcy and consumer protection attorney.