Based on our conversations with clients, we recognize that if you have been sued for a debt, it can be one of the most frustrating and aggravating lawsuits imaginable. Whether it's grappling with outstanding loans, credit disputes, missed payments, or other sensitive financial issues in court, the process can be emotionally charged and challenging. While the concept of debt itself is straightforward, debt lawsuits are all over the place. For instance, some clients have come to us because they paid an agreed upon debt settlement amount to their creditor, but the creditor still filed a lawsuit against them. In other cases, the debt was never theirs to being with, or they just flat out can’t pay the money owed and are now in the middle of a lawsuit that they also can’t afford. With serious consequences (such as wage garnishments or a bank levy) at stake, it’s important to know what to do when you get sued in a debt lawsuit. Having handled thousands of debt cases over the years, we have compiled a list of 7 helpful debt lawsuit tips for navigating through your case and getting back on track to finding financial peace.
- Try to avoid a wage garnishment at all costs. A creditor can take 25% of your income. It’s best to talk to an attorney to protect your rights and assets; for example, financial hardships can warrant an internal dismissal from the creditor.
- Beware of guarantees. If an attorney guarantees that they can dismiss your case, or guarantees how much they can reduce your debt by, you should go the other way immediately. There are so many moving parts to a debt lawsuit that to guarantee a dismissal, or an exact settlement, would be a disservice to the client.
- Don’t wait until the last minute to handle your case as this can lead to a default and judgments being entered against you. If you have ever wondered about liens and levies on your bank account, a default is the start of that situation. Even if you haven’t taken your debt seriously, and can’t pay the full amount, it’s important that you answer your lawsuit on time to avoid making your situation worse.
- Be realistic with your expectations. There is no magic wand that an attorney can wave to get your case dismissed or guarantee you an exact settlement amount. Unlike other areas of law, where certain figures are determined based on formulas, each debt case is unique; therefore, dismissals and settlements are discretionary hinging on how a judge and opposing counsel see specific details in the case.
- Know your spending limit and try to avoid getting into debt in the first place. Constantly check your account spending and if you fall behind, try to proactively speak with your creditor about the situation. In some instances, you’ll be able to work out a payment plan, but if that plan fails and the creditor won’t work with you, consult with an attorney.
- Try to avoid trial at all costs – reevaluate your ability to pay for trial and if that is something that you can afford. You want to avoid incurring extra costs on your case and try to settle for as low as possible if a dismissal isn’t a possibility.
- Communicate effectively with your attorney. This means not only being transparent about all the pertinent details of your case but also listening to your attorney when they are discussing facts and strategies. The fewer surprises and misunderstandings for both the client and the attorney, the better the results of the case tend to be.
Whether you are being sued by your credit card company, defaulted on a loan, or didn’t pay something because you don’t believe that you owe the debt, it’s important to realize what’s at stake in a debt lawsuit. You may not have taken your debt seriously, but it’s critical that you handle your debt lawsuit proactively because the consequences involved can be severe. Please make sure to follow our blog, as well as our social media channels (using the handle @BorellLawOffices) as we will be posting helpful articles and/or videos every day. If you have any questions related to a debt lawsuit, talk to us today at 305-514-0500.
