One of the main reasons people call me to discuss bankruptcy options is that they were just served with a lawsuit. Usually a bank or credit card company has not received payments in several months and they’ve hired a law firm to try and collect some or all of the balance due. Ignoring the summons for the lawsuit is a bad idea, but there are several options you can consider.
Make Payment Arrangements
If you acknowledge that you owe the debt and can afford to pay it back over time, you can call the attorney who filed the lawsuit and discuss repayment options. This will usually suspend the lawsuit, as long as you are making payments on the debt. Generally, the law firm will want to do automatic monthly payments from your checking account.
If you have multiple credit cards that you are behind on and it is quite possible that there will be multiple lawsuits against you, a payment plan might not be feasible.
File an Answer (Response)
If you have some reason to believe you do not owe the money or there is some question around the debt, you also have the option of filing an answer with the court. The response form is included when you are served with a lawsuit, so you would need to fill that out, pay the filing fee, and file the documents with the court. You usually have 30 days from the day you are served to file your response.
Consider Bankruptcy
Many times, people have other financial issues besides that one credit card that need to be handled. When you file for bankruptcy, the court case for the credit card is put on hold while the bankruptcy is processed. When (if) you receive your bankruptcy discharge, that court case is then dismissed and the creditor can no longer come after you for that debt.
Ignoring the Summons
So what happens if you totally ignore the summons? After the 30 days has passed for you to respond, the lawyer for the credit card will obtain a default judgment against you. After the judgment is granted, the lawyer is able to obtain a judgment lien. A judgment lien can result in a lien on your house, garnishment of your bank account, and/or wage garnishment as well.
It is very important for you to deal with a summons for a lawsuit before your accounts or wages are garnished. If you are in this situation in CA, please feel free to contact me at 925-586-6738 or [email protected] to discuss your options.
This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. To speak with me regarding your situation, please email me at [email protected] or call 925-586-6738.
