Step-by-Step In the Credit Card Debt Lawsuit Process

Many, many creditors will be writing off bad debt before the close of 2009. This means that process servers will be very busy during the months of January, February and March issuing civil summon's on old debt.  This debt will be sold to third-party debt collectors, debt attorneys and collection agencies for pennies on the dollar.

Generally a debt collector will attempt to collect the debt by sending you letters and making multiple phone calls to your residence or whichever numbers they can find for you. Remember that even if you settle for 50% of the amount owing, the third-party debt collector is still making a killing!

However, in recent years it has become very common for debt collectors to file a civil lawsuit against debt collectors whom they deem as "collectible". It costs relatively little for them to file a lawsuit using our court systems. If you do nothing to respond (as over 90% of debt lawsuits do, just go to the courthouse on any given hearing day and see who shows up) they win by default judgement and this grants them the right to freeze your bank accounts, put a lien on your property and/or garnish your wages until the debt is satisfied in full.

There is NO negotiating with them once a default judgment has been handed down, you often pay the original amount owing on your debt, plus interest, plus THEIR legal fees, and more bogus fees. It's not uncommon for your debt to double from what it was originally.

Not to mention the devastating impact a default judgement will have on your credit for 7 to 10 years.

This is why it is IMPERATIVE that you ANSWER their lawsuit and fight back to the best of your ability. Most people in this predicament cannot afford a lawyer, although if you can or are eligible for legal aid I would highly recommend it.

If you choose to fight back yourself, this is called being a Pro Se litigant and it is highly do-able. I'll try to break down the most common steps of a lawsuit, so you know what to expect. Please remember this is just based on my own experience and the experience of others I've talked to or worked with.

Step 1

You receive a summons and are given a time limit in which to respond. This can be anywhere from 10 to 30 days, but is often 21. READ YOUR SUMMONS CAREFULLY.

Step 2

FILE A NOTICE OF APPEARANCE, ANSWER AND CERTIFICATE OF SERVICE.

The NOA notifies the court that you are an active participant in the suit and ensures that the court and the Plaintiff send you notices of any hearings, etc.

The ANSWER is where you answer the allegations in their summons with a confirm, deny or lack the knowledge to confirm or deny type of statement in a numbered paragraph form. You also assert your AFFIRMATIVE DEFENSES, these defenses must be stated in the Answer or you lose the opportunity to use them later. An example of an affirmative defense is out-of-statute debt.

The CERTIFICATE OF SERVICE is simply a document swearing that you have sent copies of the above documents to Plaintiff. You'll need to file these documents at the courthouse, get them stamped with the date and send copies to the Plaintiff.

Then....you'll likely HEAR NOTHING for months!

Surprised? So was I at first but this is very common. The debt buyers issue their civil lawsuits in chunks, they'll be busy collecting default judgments and will set aside your file for some time as it will now require effort on their part.

If you are likely, they will drop the lawsuit or let it expire. Oftentimes, they don't want to go to the trouble of pursuing the suit any further and nothing more will happen. ESPECIALLY if they have no documentation or the debt is out-of-statute as is so often the case.

Step 3

If they continue the case and have documentation to back it up, don't despair. You still have time on your side and options. They will likely initiate the DISCOVERY phase of the lawsuit. This is where paperwork is volleyed back and forth between you and them. It's basically a big game and VERY time consuming for YOU. They are hoping that you will bow out at this point. If you do your homework and make it through this stage it will typically last for 4 to 18 months. On average with most civil lawsuits it seems to last about 8 months.

Step 4

At this point, depending on your case they will either file a Motion for Hearing and a Motion for Summary Judgment.  You will need to file an Opposition to their Motion.  Summary Judgment is basically asking the judge to make a decision without a trial because NO facts in the case are in dispute. This is BS and the debt collectors know it. I don't think I've ever seen a debt lawsuit case where facts where not in dispute.

If your case gets to this point it can be scary. Who wants to go to trial in front of a judge? You have two options.

1. You can go to the Hearing for the Motion for Summary Judgment, present your facts to the judge on why you need a hearing (basically calling out the debt collector on their lies, and often the amount they are suing for is in dispute among other things) and once you have your day in court, you present the evidence to the best of your ability and honestly it's a 50/50 chance based on the judge. Some look favorably towards Pro Se litigants, some do not.

2. You can go to the Hearing for the Motion for Summary Judgment early. The attorney for the debt collector will be there. Tell them you want to settle if they'll dismiss the case. I have never seen this tactic NOT work. However, the key is a cash settlement. You have to have CASH ON HAND to offer a lump sum settlement. These guys are greedy and they know that even once a judgment is handed down, they still have to find you, your bank account, your job (if you have one), etc. Their payday is still unknown.

In fact, if you go to the courthouse on a hearing day you will see these attorneys calling the names of the people on the docket that day asking if they want to confer in the hall prior to court. You certainly don't have to do this, but it is common for them to take a 75% cash settlement at that point AND you don't have to face the judge!

Facing a credit card debt lawsuit can be daunting, but it CAN be done and SUCCESSFULLY. 

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