Help! A Creditor is Suing Me!

At Marks Law Firm, we are often visited by individuals who have recently learned that they are being sued by a creditor. Through our consultations with clients, we’ve noticed that most people have the same few questions about that type of situation. As a resource, here are three of the most common questions, and answers that can hopefully lead you in the right direction during this difficult financial time.

1. Why am I being sued?

This is a complex question, but here is the most simple and straightforward answer. A creditor sues when it believes that it’s worth the hassle and investment of a lawsuit. Basically, it means that they think they have a chance to win the case, and get money from you that they otherwise would not be able to obtain. Creditors are smart – they will do their homework and know how to calculate the risk of a lawsuit. If they think that you have the ability to pay the debt in any way, they may choose to go after you. Even if you don’t have the money in cash, creditors could try to sue you if they think they have a realistic chance to get a wage garnishment, a lien on your house, or some other sort of collateral. Be aware of your assets, and understand that creditors are aware of them as well.

2. Who, exactly, is suing me?

When a debt goes into default, it is very rare that the original creditor will hold onto that debt. Most of the time, they just assume that loss and hedge by selling the rights to the debt to a collection agency. Collection agencies make money by endlessly calling and sometimes harassing people into paying those debts. Collection agencies, then, are frequently the ones that would be suing you if they felt that they couldn’t collect on a debt in any other way. It is still rare, however, for an agency to sue, due to the expensive costs. Sometimes, collection agencies will also decide to get rid of your debt and sell it to another collection agency. By the time you’re receiving a notice that you’re being sued, it’s possible that your debt has changed hands several times.

3. If I owe money, why bother fighting the charges?

This is the most important question of the three, and the one that leads many people down the wrong path when dealing with a lawsuit filed against them by a creditor. Many individuals, upon learning they’ve been sued, are tempted to give up and not do anything about it. This is entirely the wrong attitude to have in this situation for a variety of reasons. If your debt situation is such that a creditor is suing you, you need to take control and make sure that things don’t get worse than the already are.

The main reason to act quickly is that the court can make a judgment on the case if you wait too long, even if you don’t say or do anything. This is an ideal situation for a collection agency. They gain the right to some or all of your wages and assets, and they don’t have to pay any additional court fees. In fact, you may also have to pay the amount that it costs to bring the lawsuit to court, adding additional debt to that which you already owe.

Even though you do have an obligation to repay the debts you owe, fighting a creditor lawsuit can be beneficial to you in a number of ways. It all starts with consulting a bankruptcy attorney to understand what your creditor(s) can and cannot do, as well as what your options are moving forward. Most bankruptcy attorneys, such as Sam Marks here at Marks Law Firm, will offer you a free consultation and review your court papers to see if there are any discrepancies or abuses on the part of the collection agency. If a collection agency has been abusive or used illegal debt collection practices, you may even be entitled to a counterclaim. At the very least, meeting with a bankruptcy attorney will help you better understand your debt situation, and what you need to do to ensure long-term financial health. So don’t delay – take action today if you’re being sued by a creditor!

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