Have you just been sued by a debt collector that purchases old credit card debts? Perhaps Asset Acceptance,
Midland Funding, or
CACH (or a credit card company like Capital One)? Don't panic.
These companies file thousands of collection lawsuits against California consumers every month (or their attorneys do, from such legal strongholds as Hunt & Henriques, Midland Credit Management, Mandarich Law Group and the Legal Recovery Law Office). When you are sued by a debt collector, the first step is simply to do no harm.
Consumers often respond to collection lawsuits by making an avalanche of avoidable -- and costly -- mistakes. Below are the most common mistakes. If you avoid these you'll be ahead of the game.
I've posted these before, but I constantly get requests for the list the big-5 mistakes to avoid when you are sued by a debt collector, so here it is again:
- Failing to file a written response with the court within 30 days of getting served. When people are sued by a debt collector and get served with a stack of legal papers they freak out and panic instead of reading the papers. Here is what they miss by not reading: The first full paragraph on the summons says in part "the court may decide against you without your being heard unless you respond within 30 days." And so it is. If you don't file a properly formatted response within 30 days, the debt collector can easily obtain a "default judgment" against you almost immediately. File a timely response.
- Filing a response that says way too much (of all the wrong things). It's sort of the opposite extreme from the people who ignore the problem entirely. People who make this mistake, seem to assume that when they are sued by a debt collector they are obligated to vomit a confessional of their entire financial history into the public court record. Too often, this includes an often erroneous admission that the debt collector is entitled to every penny asked for. The fact is, there is usually no way to know precisely what the debt collector might be legally entitled to, without seeing the underlying documentation. What should a proper response say? That will be the subject of another day.
- Failing to respond to the other side's requests for admissions. During the course of a lawsuit, there is something called "discovery" which is a formal opportunity for each side to give written requests for information to the other side. A lot of consumers think that if they receive such discovery requests for information, it is something they can blow off. Indeed, it is very tempting to blow it off, because responding to discovery requests can be a big hassle, and you might have grown complacent several months after finding your initial panic of learning you had been sued by a debt collector. However , there are consequences to ignoring discovery requests.The biggest risk flows from ignoring requests for admission: If you ignore requests for admission, the debt collector can ask for the court to "deem admitted" anything that they were asking you to admit. Normally, this involves every fact that the debt collector needs, to get a judgment being "deemed admitted." So, when you are sued by a debt collector and they serve requests for admission on you, make sure you prepare a proper written response. Information on exactly how to interpret and respond to requests for admission, is a topic I hope to cover in a later post.
- Making a payment on a debt that is in litigation. If the bully is going to try and beat you up anyway, there is no point in giving him your lunch money. You probably already trying to work with the creditor before getting sued. Then you were sued by a debt collector anyway. Once they sue you, let them pry it out of your dead hand if they want it. The legitimate alternative, is to negotiate an end to the hostilities, that resolves the debt and the case, and then you pay in accordance with the resulting written terms. However, you have no reason to even offer them any money unless you are guaranteed that it makes the problem go away. The subject of when it is wise to settle and how to do it is a broad one. But the threshold mistake to avoid is giving away your money for know reason.
- Failing to object when the debt collector relies upon inadmissible evidence in court. Frankly, it's difficult to coach you on this one in a short blog post, but the bottom line is this: Probably the majority of the evidence that debt collectors rely upon in court is objectionable and would be excluded from consideration by the court if only the consumer made the proper objections to evidence.
- Becoming a Basket Case. We've already covered 5 mistakes, so this one's a bonus. Don't end up like the anxious guy in the picture. I know, me telling you to just relax, isn't going to help. But look at it this way; you are already researching the proper course of action, or you would never have found this post. You are already ahead. Anxiety comes from not having a plan. From having issues that remain undecided.
I'll tell you what, if you need a little boost in the right direction because you still feel anxious (even though I told you not to in the bonus mistake), then go ahead and fill out the contact form on this site and you will be connected to a scheduling tool to reserve a free 15-minute telephone conversation with me, Consumer atorney, Ian Chowdhury. I promise I won't stress you out.