WHAT HAPPENS WHEN YOU GET SUED BY A DEBT COLLECTOR

 PRELITIGATION:

 Validation of the Debt

 Before a debt collector can sue you it must send you a written “validation notice” telling you how much money you owe within five days after they first contact you.  So if they call you on day March 5 they must send you a validation notice which must include the name of the original creditor to whom you owe the money within five days of that date.  A validation notice will tell you that you have thirty (30) days from the date of the notice to dispute the debt.  How do you do this?  Within this thirty day period you should write a letter to the debt collector advising that you are disputing the debt and that you want it verified by the debt collector.

 This is an extremely important step and is one of the best defensive tools that you have to fight a debt collector.  Once you request a validation of the debt, the collector must provide you with written evidence that you owe the debt.  If you do nothing else before being sued, you should request a validation of the debt in writing during the thirty-day window described above. When you correspond with a debt collector seeking validation of the debt, it is important that you do two things: (i) keep a copy of your correspondence, and (ii) send all correspondence using certified/return receipt mail so that you have a record of what you sent and when you sent it.

 FIRST STAGE:        Being Served With the Summons & Complaint

1.         Service of Summons & Complaint:

♦          Personal Service:  At some point, after you received notice from the debt collector about your debt, you may be home watching television, relaxing with your family when someone knocks on your door.  You answer the door and there is a man who asks your name and if you tell him your name he will give you some papers.  If you do not take the papers, he will throw or drop them on the ground front of you (which is good enough) and now YOU HAVE BEEN SERVED with a lawsuit.  The man at the door was most likely a process server and this is what he does for a living; he goes around serving lawsuits on people.       

♦          Substituted Service: If you do not answer the door but someone over the age of 18 does, the process server will give the lawsuit to that person and tell them to give them to you.  This is called substituted service and is so named because the adult person who was served was served as a substitute for you. 

2.         The Summons & Complaint:  What he gave you includes two important documents.

♦         The first document is a summons which names you as the defendant and also tells you who is suing you.  In California, the summons tells you that you have 30 days to respond to the complaint and that you have to respond in WRITING; if someone other than you, who is over eighteen years of age, is served, then you generally have 40 days to file your written response.  The summons will tell you the address of the court where your case will be heard and also lists the address of the attorney representing the person suing you and his contact information.

♦         The other document is the complaint.  The complaint also lists the name of the party who is suing you, the attorney and the attorney’s contact information.  The complaint will also tell you the amount for which you are being sued and why you are being sued.

SECOND STAGE: Examining the Complaint

1.         A Little Bit of Panic: You probably never been sued before so the summons and complaint in your hands are things you have never seen before.  It is a completely new experience and therefore very scary.  At this point, take a deep breath and read the complaint.

2.         Review the Complaint Closely:  The first thing you may notice is that you are being sued by a company you may not recognize.  You may have had a credit card from Chase, Wells Fargo or Bank of America but they are probably not who is suing you.  If the original creditor sold your account to a debt collector, then the entity suing you will be the debt collector.  It may be Midland Funding, LLC, CACH LLC, Asset Acceptance, LLC or some other debt collector.  Because they bought the debt, they now believe they have the right to sue you.  The next step is to identify the grounds on which they are suing you.  Generally, those grounds are breach of contract, common count for money lent and account stated.

THIRD STAGE:       Now What?

You have now examined the complaint and you may say, “Well, I do owe the money.  So how can I fight this lawsuit?”  Because debt collection companies buy debt in bulk, they often do not have all the documents necessary to collect the debt.  The law works both ways.  You may owe the debt, but if the debt collection company does not have the right documents, then they cannot collect the debt.  That it why is important for you to answer the complaint.  In order to give yourself the opportunity to fight the lawsuit, you should not admit that you owe anything and force the debt collection company who prove that you owe a debt. 

FOURTH STAGE:   Answering the Complaint

You Have Choices:  Now remember you generally only have 30 days to file a “responsive pleading” to the Complaint.  The following  lists the ways that you can respond to the complaint:

♦         Do Not Answer the Complaint.  NO! NO! NO!  You must answer the complaint.  Find an attorney, legal clinic or someone who can help fill out the answer discussed below; because if you do not, then the debt collection company will take a default judgment against you and make your life miserable by garnishing your wages, seizing your bank account and/or placing a lien against your house.

♦          Answering the Complaint:   You may decide just to answer the complaint on your own.  Some California County Superior Courts will order the debt collector to provide you with a California Judicial Council Form which you can use to answer the complaint. 

If you are not given this document, you can visit the California Judicial Council Form website at http://www.courts.ca.gov/forms.htm where you can obtain the form. 

Keep in mind that when you answer the complaint, the court will hold you to the same standard of pleading that it expects from an attorney.  The answer is not the place to assert your hardship story.  That will come out at the trial. The court wants to know if you have legal challenges to the complaint. You must also assert all of your affirmative defenses to the action in your answer to the complaint. 

♦         Demurrer: You can also demur to the complaint, but you must file your demurrer within the same 30 days in which you must file an answer.  A demurrer can be used only to challenge legal defects that appear on the face of the pleadings or from matters outside of the pleadings of which the court can take notice. So, when a complaint is incomplete or discloses some defense that would bar recovery -- such as showing that the statute of limitations has run -- a demurrer is appropriate.  Filing a demurrer is a very technical procedure and any defendant should consider hiring a lawyer to do this.

♦         Cross-Complaint: If you believe that the debt collector has abused the Fair Debt Collection Practices Act or the provisions of The California Fair Debt Collections Practices Act, and if you are sued in California, you can file a cross-complaint against the debt collector at the same time that you file your answer.  Again, this is a technical procedure and you should consider retaining an attorney to do this.

Fifth Stage:    Should I Hire an Attorney?

1.         You do Not Have to Hire an Attorney.  As already noted, you can fight the lawsuit on your own.  There are a lot of websites and other sources that will provide useful information on how to fight debt collection lawsuits.  However, because debt collection companies are extremely experienced in suing people, you will be at a disadvantage if you chose to fight the lawsuit on your own.

2.         Choosing an Attorney.   If you decide to hire an attorney, be certain that the attorney you hire is experienced in defending debt collection lawsuits. With such experience, the attorney may be able to either defeat the lawsuit or negotiate a reasonable settlement.