When you neglect to pay a debt that creditor has the legal right to file a lawsuit against you. It might seem drastic or intimidating, but it’s actually fairly common. Creditors often take legal action against consumers to collect on debts because they know that even the threat of a lawsuit can prompt a debtor to send money.
If you’ve received notice that a creditor is suing you, there are a few things you need to do and a few things you need to avoid. What shouldn’t you do if you’re sued by a creditor?
Never Assume the Creditor Will Automatically Be Entitled to Your Money
Many consumers assume that if a debt is legitimate, the court will take their money and give it to the creditor without question.
Fortunately, there are laws in place that protect certain types of income from seizure, which means you might not be forced to pay even if a debt is legitimate. Even if you are sued, a creditor will not be able to gain access to certain types of income, including social security, veterans’ benefits, or disability. This means if your only income is social security, there is much a creditor can do even if they choose to file a lawsuit.
It’s important to note that it’s the consumer’s responsibility to make sure the creditor, the bank, the court system, and everyone else involved knows social security and other exempted money is an issue. An attorney will ensure that your income is protected in these instances.
For more information about social security and how it’s protected from bill collectors, check out this information from the Consumer Financial Protection Bureau.
Do Not Allow Creditors to Access Your Bank Account
You might have the option or be ordered by the court to set up a payment arrangement with a creditor. If this is the case, it’s important not to give the creditor direct access to your checking or savings account.
You should never set up automatic draft payments that provide account access.
There are too many horror stories about consumers thinking they are setting up specific payment arrangement, only to realize the creditor won’t hold up their end up the bargain to risk this “convenient” arrangement. Once you give a creditor access to your checking or savings account that creditor also has access to any money in the account. And all too often, they’ll take what they please and create a financial nightmare of the situation.
Do Not Ignore a Lawsuit
It can be tempting, especially if you think a debt is invalid, to ignore notification of a lawsuit filed by a creditor. Unfortunately, not responding to a lawsuit will result in a default judgement, which means a creditor will be granted greater power to collect on a debt by the court system. This is true whether a debt is valid or not.
Many consumers also make the mistake of assuming there is no way to defend against a valid debt.
Remember this: there is a good chance you still have a defense, even if a debt is valid.
An experienced attorney can help you navigate the complicated legal system as it relates to debt and determine the best defense based on your circumstances. In some cases, even if a debt is valid, you won’t be held responsible for paying it. However, the only way to determine this is by responding to the lawsuit.
If you’ve been served with notice that a creditor is taking legal action against you or you have questions about what creditors can do to collect on a debt, we can help. Contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).
