You just got sued for an old credit card or medical bill, what do you do?
When you default on a credit card, personal loan, or a medical bill, creditors have a right to sue you. Often, the lender will charge off your debt owed. Although it does not absolve your duty to pay the debt, your credit report will show the debt is charged off. Unfortunately, the problem does not end there. A charge off just means that the original lender considers your debt to be uncollectable and takes the debt off their books. However, more often than not, the debt is sold to another company which in turn, gives them a right to collect on the debt. Midland Funding, LLC, Asset Acceptance, LLC, and Cavalry Portfolio Services, LLC are three of many buyers of charged off debt.
Because the original lender charges off your debt, lawsuits are often initiated by the company that bought your debt. These companies purchased your debt from the original lender and the rights to sue. Typically, they start their collection activities by harrassing phone calls and threatening letters. If they are unsuccessful, they will hire a local Oklahoma collections law firm to sue you.
If you get sued by one or several of these creditors or even an original creditor, we always recommend filing a response. Many of these companies that buy charged off debt don't want you to respond, so they can get a default judgment against you. A default judgment is whereby the creditor is able to obtain a money judgment against you without your appearance because you failed to respond to the lawsuit. With a default judgment, a creditor can begin garnishing your wages, seizing money in your bank account, and obtaining liens on your property.
Here are some helpful tips in case you get sued:
- Carefully Read the Paperwork - The Petition and Summons will typically tell you how much time you have to file an answer. It will also tell you who is suing you and for what dollar amount. Calendar the due date.
- File a Response Timely - In the State of Oklahoma, you are typically granted 20 days to respond to a Petition from the date of service. Under Oklahoma law, service is valid if the paperwork is served on an individual who is 15 years of age or older at the person's dwelling house or usual place of abode. Make sure you file your answer timely.
- Answer the Petition - the creditor's allegations will be listed on the Petition. For each of the allegations, you will need to admit, deny, or deny on the basis of lacking enough information or knowledge.
- Negotiate with the Creditor - while the lawsuit is ongoing, you can try to negotiate a settlement of the debt. Explain that you cannot afford to pay the full amount but are willing to pay some of it. You might be able to work it out and avoid court.
- Hire an Attorney - It's always a good idea to obtain professional advice.
At the very least, filing a response will provide your with additional time to decide what you want to do and to weigh your options. If you are looking to possibly negotiate and settle the debt, it is always recommend to do so before the creditor obtains a judgment against you. Once a creditor has a judgment against you, they are less likely to settle especially if you have a job that they could garnish.
Let us help evaluate your situation. Call us today to schedule a free 30 minute no obligation consultation at (405) 702-7795.