Receiving paperwork saying that you are being sued can be a terrifying experience. The best thing to do if you find out that you are being sued by a credit card company, a healthcare provider’s office, or a debt collector is to try to stay calm and get a better sense of the situation. Here are some steps to take if you are being sued for credit card debt or medical bills.
Review the Paperwork
Review the paperwork once you receive it. Keep in mind that a threat to sue is not the same thing as a lawsuit against you. If the paperwork is only saying that the creditor might sue you, you may have some more time and other legal options available to you.
If the paperwork is notice of a lawsuit, you should receive a complaint that has been file-marked by the courthouse and a summons that explains what the court case is about and how you need to respond. Additionally, you will not usually get notice of a lawsuit from a regular first-class mailing.
You could have also received the paperwork in error, such as receiving paperwork for a former tenant where you live now or from someone who has a similar name. Therefore, it is important to figure out what the paperwork is before you get too panicked.
Respond to Lawsuits
If the paperwork is clear in that it is a lawsuit against you, you will need to act quickly. You can contact an attorney for assistance. If your time is limited or you cannot afford a lawyer, you will need to respond to the lawsuit. Otherwise, the creditor may be able to secure a default judgment against you. If this happens, the creditor may be able to place liens on your property, garnish your wages, or take other action to enforce the judgment against you.
Your response will need to be in writing and will need to deny the complaint. Generally, Nebraska law gives you 30 days from the date you were served with the paperwork to file your response. You will file your response at the same courthouse where the complaint was filed against you. You will also need to mail a copy to the creditor. Click here for an example of an Answer/General Denial from the Nebraska Supreme Court.
Gather Information
The more information you can provide to your lawyer, the better. Try to find all communications from the creditor that is suing you, including previous collection letters and bills. If you ever disputed a portion of the debt, place that information together with your other documents. Keep all this information organized until you can give them to your lawyer.
Write Down Details
Write down as many details as you can remember and verify about the debt, such as the date the account was opened, why it was opened, whether you signed any document to open the account or agree to pay for treatment, the amounts you paid, and how you made payments. Also, write down how and when the creditor contacted you since if they violated certain debt collection rules, you could have a claim against them.
Verify the Debt
Before you go any further, you might want to verify the debt listed in the court complaint is accurate. Just because the creditor is suing you does not mean that the information is accurate or that the creditor has proof that it is. Many credit card companies and medical providers sell their debts for pennies on the dollar to debt collection companies. Some of these debts may be bad debts, such as beyond the statutory time period to collect on them. They may contain inaccurate details, such as the balance, late payment dates, or the opening of the account. Some debts might even be fraudulent.
The Fair Debt Collection Practices Act gives consumers the right to ask for verification of a debt by doing so in writing. You should mail a certified letter return receipt requested to the party that is suing you.
Explore Your Legal Options
Next, you might want to consider various legal options for handling the debt and the lawsuit against you, which may include:
Settling the Debt
It can be a hassle for a creditor to go to court, prove the debt, and enforce a judgment against a debtor. Some creditors may be willing to drop the case against you in exchange for the payment of a portion of the debt. A lawyer may be able to negotiate with the creditor on a lower-agreed amount of debt that you pay off.
Participating in Credit Counseling
Another option you may have is to participate in a credit counseling program with a certified credit counselor. With this option, you might be able to enter into a debt management plan in which you pay off your debt by making a series of monthly payments. The credit counselor may negotiate with your creditors to waive late fees, reduce balances, lower interest rates, or adjust monthly payment amounts.
Going to Court
If your creditor won’t budge or you have viable claims against them, you may decide to go to court to fight the lawsuit. You may also decide to go to court if you do not owe the debt or the statute of limitations has expired on the debt. A knowledgeable lawyer can advise you whether going to court makes sense for your situation.
Filing Bankruptcy
Another option is to file bankruptcy. Credit card and medical debts are unsecured debts and can be discharged through bankruptcy. Filing bankruptcy will put an automatic stay in place, meaning your creditors will have to stop all collection efforts while it is in effect. Filing bankruptcy may be preferable when you have other debts you cannot afford to pay and no defense to the underlying lawsuit. If a creditor wins the lawsuit against you, they might be able to garnish your wages, which can put further strain on your finances, so bankruptcy can provide you with much-needed relief.
Contact a Nebraska Debt Collection Lawyer for Help
If you are being sued, it is best to seek legal advice and representation from a knowledgeable Nebraska debt collection lawyer. McGuire Law Offices can review your situation and advise you of your legal options. We can also help with negotiating a settlement, responding to a complaint, representing you in court, and crafting a defense on your behalf. Contact us today for a free consultation.
