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What to Do When a Creditor Sues for Payment

It’s a moment that can be terrifying: you collect your mail and see a certified letter from a law firm. You open it and learn you’re being sued for the money you owe on your credit card. Now what? You’ve never been sued before. You can’t even remember going into a courthouse. Can you handle this yourself? Do you need a lawyer? How much is that going to cost? All the anxiety you’ve been feeling over your unpaid bills is forming a tight knot in your stomach.

Relax. You have a few weeks to prepare an answer for the court. The important thing is to understand your options:

  • Do nothing. You are not required to file an answer with the court, but failing to answer will allow your creditor to win a default judgment.
  • File an answer admitting you owe the amount in question. You can hire an attorney to file the answer, or you can do it yourself and save the attorney’s fees. You’ll still have to pay the court’s filing fees. The court will set a date for the hearing, at which time you will lose the case.
  • File an answer disputing the debt. There are defenses to a creditor lawsuit, but you must have some reasonable evidence to cite in your answer that will raise a question of fact with the court. If you’re just blowing smoke, the court can award a summary judgment for your creditor based on the complaint and answer alone. Again, you can hire an attorney or file the answer yourself.

If you actually owe the money in question, none of these options will do you any good. Your creditor will get a judgment for the amount in the complaint and can then petition the court to allow a garnishment of your wages or some other means of compelling payment. If the judge decides you have the ability to pay, but you simply refuse, you could spend some time in jail for contempt of court.

For many debtors, the best option is to file for bankruptcy. When you file for bankruptcy, the law offers certain protections, such as an automatic stay, that prevent the lawsuit from going forward. If you owe several creditors, the automatic stay can relieve you from multiple creditor lawsuits.

An experienced Atlanta bankruptcy attorney at DebtStoppers can explain how the process protects you and evaluate your finances to see if bankruptcy really is your best option. To schedule a free consultation, call DebtStoppers at 404-796-7161 or contact our office online.

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