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What to Expect When You Are Being Sued
Questions and Answers Regarding Lawsuits
At Krumbein Consumer Legal Services, Inc., our consumer protection attorneys have more than 20 years of experience in helping consumers who are being sued. These lawsuits are usually filed by debt buyers who are trying to collect on a debt. Sometimes you owe the money. Some times you have a defense (like the Statute of Limitations or a previous Bankruptcy). Some times you never owed the money (like ID theft and billing errors. Sometimes just filing that lawsuit is against the law, and they are violating your rights when the step into the courtroom.
Our goal is to help you understand your rights under the law, so that you can be proactive and wise. Below are some frequently asked questions and answers about debt buyer lawsuits for your information.
For a free confidential consultation with an experienced lawyer about your situation and your options, call us at 804-673-4358 or fill out our intake form on our Contact Us page.
Facts about Debt Buyers
Q. What is a debt buyer?
A. A debt buyer is a company that claims to have bought a debt that you (supposedly) defaulted on and now it claims you owe the debt to them.
Q. Is it legal for a debt buyer to sue me?
A. Yes – under certain circumstances. We have not yet seen a situation where a debt buyer can actually prove it owns the debt. But assuming it truly owns the debt, and it is within the statute of limitations, and you have never filed Bankruptcy, and they are unaware of any legitimate defenses, it is proper for the debt buyer to sue you. We see those pretty rarely, but it is possible.
What to Do If You Are Being Sued – ANSWER the Debt Buyer Lawsuit
Q. Do I have to answer the lawsuit or can I ignore it?
A. If you ignore the lawsuit, the judge is required to enter a default judgment against you in favor of the debt buyer for the amount they sued for, with a reduction for any payments you made.
Q. What is a default judgment?
A. A default judgment is an order of a court that you owe the money the plaintiff sued for. If you owe the money, it does not change that. If you do NOT owe the money, it changes the circumstances a lot. You owe the money, and they can now attempt to collect the money from you by force, including bank or wage garnishments, liens on houses or other real estate, judicial sales of houses, cars, attaching stocks or bonds, and other actions.
Q. Why is a default judgment a bad thing?
A. It is bad for several reasons. A judgment can appear on your credit report for many years. Bank accounts can be garnished. Your wages can be garnished. If you own personal property or real estate, it can sometimes be sold at a “sheriff’s sale” to pay off all or part of the judgment.
Q. How do I avoid a default judgment?
A. Answer the complaint in the time allowed by law! In Small Claims Court and General District Court, you must appear in court on the hearing date. In Small Claims Court, the trial will be that day, so bring any documents or witnesses with you that day. In General District Court, you will set a trial date, then after the plaintiff sends a “Bill of Particulars” or statement why you owe the money, you must file a response, called a “Grounds of Defense” within the time permitted by the court, then appear for the trial. In circuit court, you have 20 days from when you are served to file an answer with the court. The court will then set the case for trial by conducting a “pre-trial conferece”, where the trial date will be set.
Q. I understand I should file an answer if I am being sued. How do I do that?
A. You must respond to each paragraph in the Bill of Particulars or Complaint telling them whether you admit or deny the allegations. If you agree with all of the statements in the paragraph- they are all completely true, you must admit the statements. If you do not know if they are true, you should say that you do not know if they are true, and ask for proof. If you know they are false, you should deny the statements in the paragraph. You must file it with the clerk of the court and send a copy to the lawyer representing the debt buyer.
Q. I understand how to file the answer. What do I say in my answer?
A. We would have to talk with you about your own unique situation before we could answer this question. Typically, we point out that the debt buyer does not own the debt and our client does not owe the debt buyer. Also, if it is applicable, we normally state that the Statute of Limitations has expired. We do not recommend answering “I don’t have a job or any money” and we don’t recommend filing a counterclaim except in special circumstances. The judge wants to know why you don’t owe the money or why you don’t owe that much money.
The Collection Trial – What to Expect in Court
Q. After I file my answer, what happens next?
A. The court will normally set the case for trial. This may be in a month or six months depending on the court’s schedule. If you were in court, you will know when the trial is. If you were not in court, you may have lost already, and you should contact the court to find out what happened, and if there is a trial and what date.
Q. What happens if I miss my court date?
A. Normally, the judge will enter a default judgment against you – just the same as if you never answered the complaint.
Q. What happens at trial?
A. The debt buyer or creditor is the plaintiff. The plaintiff must prove its case against you. The plaintiff will call any witnesses it has and try to introduce as evidence any documents it has to prove you owe the debt, in the amount they claimed, to them. You can then show any evidence you have, if you need to show any.
Q. What if I know I owe the original creditor – such as Discover Card, Bank of America, Capital One, etc.?
A. The debt buyer has to prove that it owns the debt. We have seen times when two debt buyers claim to own the same debt! This is why a debt buyer must prove it actually owns the debt. You may admittedly owe money to the original creditor but you don’t owe money to the debt buyer unless it proves in its lawsuit against you that it truly owns the debt that you owed to the original creditor. We have not yet seen this happen. If the plaintiff is the creditor, you need to review the facts and circumstances with an attorney. If there is a defense, you should claim it. If you do not have a defense, you can get in trouble for not admitting that you owe the money, called sanctions.
Q. If I hire you, do I have to show up for the trial?
A. Each case is different but we normally don’t need you to be at the trial because you can’t testify to whether a debt buyer owns the debt- you do not know that. If there are things you can testify to that will help your case we may want you to be at the trial, for example the date of last payment, or your prior Bankruptcy. In the unlikely event that you receive a subpoena from the company that sued you, then you must to show up.
Q. How do I know if I won or lost?
A. You win if the court dismisses the case with prejudice. You also win if the court enters a judgment in your favor. We do not consider it a win if the court dismisses the case without prejudice, or the plaintiff enters a non-suit, as you could be sued again on the same debt, even though this is relatively rare. A non-suit is a dismissal without prejudice, and is not a complete win.
If You Win the Collection Case – What Happens Next?
Q. Can the debt buyer file an appeal?
A. Anyone can file an appeal from General District or Small Claims Court and start the trial over in Circuit Court. This can happen but is fairly rare in our experience.
Q. If I win at trial, will the debt buyer’s account or creditors account on my credit report be removed?
A. Maybe. It should be removed from your credit reports as winning the case (dismissal with prejudice or judgment for you as the defendant) means that you do not owe the money to the debt buyer. So, the debt buyer should automatically remove the account from your credit reports. This rarely happens. To make sure, we will help you send out dispute letters to the credit reporting agencies (Equifax, Experian, and TransUnion) to request that they remove the account. If they do, then you are done. If they don’t, then we can discuss suing the credit reporting agencies and the debt buyer. We have filed numerous such cases in the past. The original creditor may or may not have to remove the account from your credit report. Maybe you won because of a technical defense- like they could not get the evidence in. Maybe you won because of the Statute of Limitations. In those cases, the original creditor can report that you did owe the money, but no longer. In those circumstances, there may be errors in the way they report the account. We can sue in that circumstance, also.
Q. How much will it cost to talk to you?
A. Nothing. We don’t charge for initially talking with you on the phone or meeting with you in person to help you understand your options.
Q. What do you charge to represent me at the trial?
A. It depends, but in most cases, we can represent you for a low out of pocket cost. If some cases, we may charge less, if we think we can recover our fees from the plaintiff for bringing a lawsuit against you in violation of the law.
Q. Why does it matter if the debt buyer appears on my credit report?
A. Because we intend (but can’t promise) on winning your collection case, and then if the debt buyer does not correct your credit report (by deleting the account), we can sue the debt buyer for violating the Fair Debt Collection Practices Act and/or the Fair Credit Reporting Act. We advance the expenses, except the filing fee in Federal Court, and if we are successful, we take a contingency fee out of any recovery from the debt buyer. We only get paid if we win – there is never any out of pocket expense from you to us when we sue a debt buyer, except the filing fee.
If You Are Being Sued and Want to Take Action – Call Us
Q. I want to discuss my case with you. What do I do?
A. It’s simple. Call us at 804-673-4358 or you can also fill out our intake form on our Contact Us page.
Contact us today for a free confidential consultation, as every day that passes may be the last day that you can take action to PROTECT YOURSELF. We can help ensure you are in a position to get what may be false information off your credit report, and sue for damages if they do it wrong.
Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.673.4358
You can fax us: 804.673.4350
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
1650 Willow Lawn Drive
Richmond, VA 23230