If I Am Being Sued by a Creditor Can Bankruptcy Get Rid of the Lawsuit?
Getting rid of a lawsuit in bankruptcy depends on a few factors. One of the main factors includes determining if the liability associated with it is dischargeable. Sometimes a debtor may receive a lawsuit or learn of being sued and ignore it. This can turn into a default judgment giving creditors an upper hand on taking more legal action against you, such as a lien or wage garnishment.
In understanding whether the lawsuit can be discharged, you need to get clarity on the type of debt liability attached to the suit.
Debts which you may be responsible for if it doesn’t qualify for discharge:
- Debt related to outstanding student loans.
- Debt obligations related to alimony/spousal or child support.
- Debt owed to a government entity (taxes, restitution, or fines)
- Debt related to DUI that resulted in injury or death.
These are just a few basic case scenarios in which you may not be eligible to wipe out a lawsuit. If fraud or malicious acts are associated with the lawsuit this could also hinder chances of a discharge. On a positive note, you may be able to avoid having a lien placed on your property if you begin the filing process soon and quickly. In some cases, you may be able to remove a lien or provide protection for property through bankruptcy exemptions. Discuss questions and concerns with an experienced Dallas / Fort Worth bankruptcy lawyer.
What You Should Know About Lawsuits and Being Sued
What You Should Know About Debt Lawsuits
When creditors don’t receive payment for debt that is past due or accounts that are delinquent, they may look to exercise their legal options in collecting from debtors. A lawsuit may be filed against you through a small claims court or federal court, depending on how much you owe. If you have the right knowledge when it comes to defending yourself, you may be able to negotiate or win against a suit filed.
Some are not familiar with the process of a lawsuit. You’ll know you are being sued when a summons is delivered to you by a process server. The information has a complaint attached that is usually filed by the creditor or plaintiff, which explains what they are seeking from you, the debtor or defendant. The information presented to you has already been filed with the court.
To avoid a default judgment, you respond to the summons by submitting an answer to the court or showing up on the scheduled court date. A default judgment is basically an automatic win for the plaintiff or creditor who filed the suit against you. This could lead to wage garnishment or another judgment order leading to legal collection.
Some debts may not be collectible meaning they may not be yours. This could result from a creditor or debt collector trying to collect on expired debt or it could be something that was already paid and you just need to provide proof. If the debt is yours, and you have no way of paying you should speak to a bankruptcy attorney. Many judgments can be dismissed through bankruptcy.
What You Should Know About Credit Card Delinquencies and Potential Lawsuits
Credit card debt is the most common form of debt that is unsecured. This means that if you default on payments or choose not to repay what is owed, the credit card company has a right to sue. Depending on what is owed on the account, a lien may be placed against property or you could experience garnishment of wages. Taking advantage of your rights includes validating debt in question and understanding the statue of limitations.
After so many days of without payment being made on your account, the debt gets charged off or written by the credit card company as a loss. This may happen after about 180 days or so. The credit card company sells the debt to debt collectors or a collection agency. While many wonder whether or not a credit card company will sue for unpaid debt, they could but it is more likely a lawsuit would be filed by the collection agency.
Larger amounts of credit card debt may prompt the credit card company to file a suit against you. One of the main reasons why debt is charged off is because credit card companies get a tax exemption. If you are being sued and fail to show in court or answer the summons set to you, a default judgment is likely.
Debtors who request validation of debt are more likely to show up on a scheduled court date. Validation makes sure the debt is yours if you learn about it from a collection agency. The statue of limitations begins from the last day a payment was made and affects when a creditor can sue for debt owed. If the limitation has passed, this is information that can be presented in court for time-barred debt.
Find an Experienced Dallas Bankruptcy Attorney
Find an experienced Dallas bankruptcy attorney to help ensure that any and all potentially dischargeable debts are eliminated.
Dealing with a Lawsuit From a Credit Card Company
Being Sued by a Credit Card Company?
Being sued for credit card debt makes many consumers nervous about dealing with the situation. The issue becomes more complicated if you’re unsure if the debt is really yours or you can’t afford to pay it. While creditors should be able to provide proof related to their claim, there are several actions consumers should consider when dealing with a debt lawsuit.
Upon receiving notice of a lawsuit being filed against you, check the statute of limitations for the state you live in. This gives an idea of whether or not the company suing is looking to collect within the time limit for the debt in question. If the limitation has expired, this may be grounds for the lawsuit to be dismissed. Creditors often ignore limitations since many consumers aren’t aware they’ve passed or don’t know to check them.
Ask to have debt validated. Consumers have a right to verify debt collectors and their intentions including requesting information regarding the debt. You may request to have all information reviewed, including your name, Social Security number and address with what is on record with the credit card application. Validating the debt includes getting information about when the account was opened, last payment made and the amount due. If the creditor isn’t able to produce this information as well, it could be used in your favor in court.
Any information presented by the credit card company should be thoroughly reviewed for accuracy. If a date is scheduled, make an effort to attend or submit an answer to the court. Failing to show may result in a default judgment that could lead to wage garnishment. Questions and concerns should be review with a legal professional.