What Are My Options If I am Being Sued for a Debt?

Being sued for debt can be very stressful; but, don't panic! There is hope and you have options. But, be aware that lawsuits have deadlines that you must meet. Usually, you must file a written response to a lawsuit. Failure to timely file written response will result in a "default" judgment. You want to avoid such a judgment because it makes defending against the lawsuit much more complicated. So, getting competent legal advice as soon as possible is crucial. Don't procrastinate!

Recently, there has been a large increase in a type of debt lawsuit known as a "debt buyer" lawsuit. These lawsuits are brought by companies that buy large amounts of "bad debt" from credit card companies and others. Debt buyers usually pay only a few cents on the dollar for the "bad debt" that they buy. They are not interested in settling the matter with you. Rather, they are looking to make a profit off of you by collecting more from you than they paid for the "bad debt". They do this by hoping that you will ignore the matter long enough for them to get a "default" judgment against you. Then, they can garnish your wages and bank accounts and attempt to seize property from you to satisfy the "default" judgment. Not all debt collection lawsuits are of this type and it is important to determine early on if this is the type of lawsuit you are facing. An experienced debt relief lawyer can make this determination for you.

If you are facing a "debt buyer" lawsuit, you usually have a range of effective legal options. One option may be to file an official response to the lawsuit called an "Answer". This will almost always prevent a "default" judgment from being entered against you and give you and your attorney time to properly investigate the matter. Many times it will be clear that the debt buyer simply cannot legally prove you owe any debt at all. Sometimes, debt buyers even file debt collection lawsuits after the statute of limitations has run out. In such circumstances, you might be able to turn the tables on the debt buyer and force them to pay money damages to you for suing you in the first place.

Another option might be to file either a Chapter 7 "straight" bankruptcy or a Chapter 13 "debt consolidation" bankruptcy case. Either of these options will immediately stop the lawsuit and protect your property. Chapter 7 will eliminate most all of your debts, including lawsuits. Chapter 13 will give you a way to make affordable monthly payments on all of your debt and protect you from lawsuits and almost all other types of debt collection efforts.

Our attorneys represent clients in debt relief matters in Alabama and Mississippi. You can arrange for a free, initial consultation with one of our attorneys to review all of your options with you. When you are being sued for debt collection, it is very important to get the advice of an experienced debt relief attorney; so, again, don't procrastinate!