Debt Lawsuits: FAQ and General Information

November 14, 2008

This post discusses some of the questions our office receives about debt collection lawsuits. They are listed in question and answer format below.

A collection agency has sued me on a five-year-old credit card debt. Can they do this? And why are they suing now?

Debt collectors routinely search databases to determine if their Âaccount holdersÂ have recently started new jobs, purchased houses, or acquired other assets.

The debt collector will then file suit against these people, because the collector figures it stands a good chance of recovering something from people with good jobs or assets.

But, there are statutes of limitations that apply to debt collection. In other words: if you are sued on an old debt, you can raise the defense that the debt is too old to collect.

But, you must specifically raise this defense, usually very early in the lawsuit. Contact an attorney immediately if a debt collector has sued you.

Even though you must raise the defense yourself, debt collectors violate certain laws if they knowingly sue on debts that are past the statute of limitations. This is another issue either you or your attorney should research.

If a Creditor or Collection Agency Sues You

Even if you are unable to get an attorney, you should go to court and force the collection agency to prove its case.

Sometimes the extra charges and fees collection agencies seek are not valid. But, you must be in court to object to these charges. Otherwise, the court might assume the charges are valid.

It is very important to file a response with the court and to meet all filing deadlines.

Default Judgments

It is critical that you attend all hearings and trials. If you do not appear in court on your court date, the judge may issue a default judgment giving the collection agency the full amount of its claim.

But, you may not owe the full amount the collection agency claims you owe. So, it is very important for you to present your side of the story to the court.

Garnishments and Liens after Judgment

If the court enters a default judgment (or final judgment), the debt collector may be able to file a lien or attachment on your property or garnish your wages or bank account.

On the other hand, there are ways to prevent and / or fight liens, attachments, and garnishments. This is why it is very important for you to attend all your trial and hearing dates, even if you do not have an attorney.

What if the court has entered a default judgment in my case?

There are still some things you can do. Contact an attorney or research your courtÂs procedures for more information. Do so immediately; there are strict deadlines you must observe.

What if I went to court, but lost my debt collection case?

You may be able to appeal the courtÂs decision. Again, there are strict deadlines, so you will want to research your options for appeal or contact an attorney as soon as possible.

Even if you are not able to appeal your case, you may be able to take steps to resolve the matter, thereby avoiding garnishments and liens.