Most people ignore lawsuits filed by their creditors and it ends up being a huge mistake. Their wages get garnished, they get hauled into a deposition about their ability to pay a judgment. Their lives are under a microscope and they can do virtually nothing about it.
The Typcial Credit Card/Creditor Lawsuit
Typically, your creditors will file a lawsuit against you when you have fallen behind on your payments 4 or more months and have not responded to their attempts to contact you. With regard to Bank Credit Cards, they will typically attempt to contact you and work out a payment on your past due accounts for about 6 months, after which they will charge them off and sell them to collection agencies. Just because they charged off your account does not mean that you are free and clear from the debt. The collection agencies will typically pursue the payment of this debt for a substantial amount of time and will more likely than not retain a Debt Collection Attorney to file a lawsuit against you to get the money that owe.
Once the Debt Collection Attorney gets involved the game changes. You are no longer dealing with harassing phone calls or collection letters. You are now facing the real possibility that a lawsuit is going to be filed and you are going to have to deal with the courts. Most people when faced with this situation ignore it. This is a big mistake. If you ignore a lawsuit and do not respond within 20 days, your creditor or the collection agency wins without a fight. They get what is called a default judgment. A default judgment is basically a determination by the court that you did not care enough to respond to the lawsuit against you so you lose! This probably does not sound like a big deal. So what! Well, the so what, is that your creditor or the collection agency can now tack on additional fees and costs to the amount that they claim you owe! That’s right, instead of owing the balance on the account you will owe the balance + late fees + interest + court costs + the Debt Collection Attorney’s fees + post judgment interest, which in Florida is 11%. So a typical $3,000.00 balance before the lawsuit will explode to $5,000.00 to 8,000.00.
To make matters worse, once they get a Final Judgment against you they are able to pursue the collection of this judgment with the assistance of the courts. That’s right you will no longer just be dealing with your creditor, the collection agency or Debt Collection Attorney, you will have to deal with the courts as well. With the courts help, your creditor or the collection agency or Debt Collection Attorney will be able to seek a garnishment of your wages or bank accounts. There are certain exemptions to this process, but if you get to this point you are already behind the curve! They will also be able to set a deposition, which is basically a sworn statement, at which they will ask you questions under oath about assets and money in an attempt to find what ever money and assets you have that they can take to satisfy the judgment against you. As you can imagine this is not a pleasant experience.
There is hope. Most of the time creditors, collection agencies and their attorneys don’t expect you to put up a fight. They expect you to ignore the situation and they can get an easy default and final judgment against you without having to work. When you take a stand against their lawsuit you level the playing field. You make that easy money turn into a difficult recovery. There are many instances where the lawsuit that is filed is a boiler plate complaint, which has flaws in it with regard to your specific situation. That is why it is important to retain an attorney to fight for your rights. Many times the purpose of fighting the lawsuit is not a complete victory in court, but rather to set up a negotiated settlement that is more beneficial to you than being slapped with a default and final judgment.
The key is to act within the time frame set up by the courts in their procedure. You only have 20 days from the date that you are served with a lawsuit by one of your creditors to respond to it to avoid being hit with a default judgment. So Time is of the essence! It is important not only to respond, but also to retain an attorney to ensure that your rights are protected and a strategy is developed to obtain the best possible resolution to a default judgment.
Many of you may be saying to yourself that hiring an attorney costs money, which I don’t have. You are right, most attorneys do not work for free. However some, such as myself have set up fee structures that make it extremely affordable to hire an attorney to defend cases such as this. In our case, we do not charge our clients by the hour to defend these cases, we charge a low monthly fee. That way our clients can obtain the legal representation they need without having to pay high hourly fees. Our approach puts the pressure on us to efficiently handle their case, as oppose to the hourly fee model which promotes inefficiency.
If you are interested in finding out more about our Debt Defense services, contact us today for a free consultation. We currently limit our practice to Miami-Dade and Broward Counties.
