Owing money is stressful enough without the creditors suing to be paid back! We all want to pay our bills, but occasionally hard times befall us. Here is a list considerations that will help you determine if you should hire a lawyer, or if your able to handle this PRO SE (by yourself):
1. What are the first things I should look at once I know I’m being sued for Credit Card Debt?
Being served with a lawsuit, or seeing your name on a docket, can be extremely stressful. But there are a few initial considerations to take into account that can sop the suit in its tracks here and now. First of all, where do you live, and where was the suit filed? You’ll need to determine if VENUE and JURISDICTION are proper. A court must have authority over you in order to bind you to a ruling. If you file a response or appear in court, you have basically waived any jurisdictional argument, because you have ‘availed’ yourself to the court. If you, for example, live in Duval County and suit has been filed in Miami Dade, you need to raise this defense. Next, once you see you’ve been sued, determine under what CAUSE OF ACTION. Usually this will be a COUNT (I, II etc). There are time limits to bringing certain causes of action, and once they’ve passed, its too late to sue. In credit card debt cases, the two most common causes of action are BREACH OF CONTRACT and ACCOUNT STATED. The STATUTE OF LIMITATIONS on a Breach of Contract cause of action is five (5) years. For an Account stated cause of action, its four (4) years. If You have a credit card that was shut off in 2009, and someone is trying to sue you to recover on it today, they’re tough out of luck, and you should raise a STATUTE OF LIMITATIONS defense in your ANSWER (if applicable; more on this below).
The third thing to look at is the amount being sued for. There are different rules for small claims court (less than $5000) versus County and Civil Courts for higher amounts. In small claims court, you don’t have to answer the complaint once your served with it. There will be a mandatory PRE-TRIAL CONFERENCE set by the court. I’ll explain more about this later.
If the amount of the suit is more than $5000, then you need to REPLY to the complaint; one way to address this is called an ANSWER, in which you admit/ deny/ state without knowledge and raise any affirmative defenses you have. You have 20 days from the date of service to do this. If your nervous about answering incorrectly or raising appropriate affirmative defenses, then reach out to an attorney or make an appointment with your local legal aide, so that an appropriate response can be submitted with the assistance of counsel.
2. Before you file an answer or go to your pretrial conference
- You need to be served with the suit. Simply seeing the lawsuit online on the docket is not adequate proper notice to you as a Defendant, especially if your pro se.
- If you are sued, call the attorney or law office who signed the lawsuit. There are TONS of these cases, and they clog up the court system; most of them settle anyways, especially in small claims court at that mandatory pretrial we mentioned earlier. There is no reason to wait for the Pre-trial conference, or until a court hearing is set. Call now, be honest about what you can afford and see if they can work with you. Oftentimes, discounts are available off the balance due if paid back within a certain period of time (example, 75% of the debt if paid back within 24 months). Alternatively, many companies can extend debt repayment over up to 60 months, and there is often no interest compounding on the debt at this time.
It is also always a good idea to request a verification of the debt (VOD). This is asking the Plaintiff to prove that the debt is in fact yours. Make sure the last four of the social security numbers for you and the debtor meant to be sued match as well. There are a lot of Jose Gonzales’ and Jane Smiths out there, and mistakes happen.
3. And Finally…
If you are unable to settle, then you’ll attend the pretrial conference (the date will usually be on the subpoena attached to the service of process) if its small claims, or file an ANSWER, MOTION TO DISMISS or other response if its in regular court.
Basis for Motions to Dismiss include the jurisdictional and statute of limitations arguments addressed earlier.
4. Closing Thoughts
Firstly, if you are summoned to a hearing and you do not show up, a DEFAULT can be entered against you. In Florida, a default has to be followed up with a Motion for FINAL default, which contains affidavits which support the Plaintiffs case. If the default is granted, then you will have a judgment against you, which can be ENFORCED. Some ways that Plaintiffs enforce judgments include garnishing you bank account or wages; not a fun surprise, so be active and involved in your legal process.
IF you know the debt is yours, but you just CANNOT pay it, tell the Plaintiff’s law firm that you would like to discuss a CONSENT JUDGEMENT. This saves the time and stress of court appearances, but it does mean you are agreeing to have the judgment entered against you. A judgment will sit on your credit report for 20 years until paid, and will continue to garner interest, albeit, it will be at the states prevailing interest rate (around 6.5% last I checked, but this changes OFTEN).
IF a judgment is entered against you for failure to appear, consenting to judgment, or losing in court at a hearing or trial, then you may be able to stave off garnishment/ enforcement of that judgment by filing a CLAIM OF EXEMPTION. This is a document, often accompanied by a fact information sheet, that tells the court that whatever money you have must remain with you, and cannot be expended on this debt because 1) Your the Head of Household 2) You have Dependents 3) You make less that $750/pay period 4) Your only income is social security or disability (ie: you income is exempt). There WILL be a hearing on the claim of exemption so be ready to prove your claims. If your head of house hold and have dependents, bring a tax return that shows the court this is accurate. If its about the amount you make, bring a pay stub, or bank statements. Its up to you to prove up any facts you allege.
Additional resources provided by the author
Your are not without the right to counter sue for violations of the FDCPA and you also have the right to report predatory collection practices to the CFPB. Creditors can only call during certain times of the day, a certain number of times per day, and must give certain disclosures to you when they call. Violations of these rules can result in money damages being awarded to you. Reach out to an Attorney or Legal aid for more information on this.