Dealing With Creditor Legal Action

While unlikely, it is possible that creditors may legally pursue delinquent accounts in an attempt to collect the debt owed. Long length of delinquency, creditor policy, and very high balance are factors that increase the likelihood that legal action may be taken on a particular account.

Why is a creditor able to send an account to an attorney or pursue legal action?

A creditor can send your account for collection if it is delinquent, as is agreed upon when signing your name on the credit application. While most accounts are sent to a lawyer’s office strictly for professional debt collection, a creditor may ultimately choose to pursue legal action in an effort to collect money that is owed to them.

What is a summons?

A summons is an official notification to an individual (i.e., a debtor) that a particular creditor has filed legal suit against him or her. A summons includes the name of the creditor that has brought the legal action, the location of the court where the suit has been filed, and, generally, also information about how a debtor is expected to answer the lawsuit (e.g., the date by which the debtor must respond, the location of the court at which the debtor may be expected to make an appearance, etc.).

What should I do if I’ve received a summons?

You should immediately contact your debt settlement company or if you don’t have one, an attorney. Your representative will notify you about the information that is needed to proceed with the processing of your account. A representative of the office that is working with you will contact the office representing the creditor in an effort to negotiate a settlement or determine other payment arrangements.

Do I need to obtain an attorney?

It is your decision whether or not to obtain an attorney. However, should you decide to obtain an attorney and need help with this, you might contact your local Bar Association for a referral.

Do I need to answer a summons?

It is ultimately your decision as to whether or not you wish to respond to the summons. Individuals who decide to respond to a summons generally include the following information in their response: an acknowledgement or dispute of the debt, applicable circumstances or hardship, and a description of their involvement with a debt settlement company or law firm in an effort to resolve their debt situation.

Do I need to appear in court?

If there has not been a settlement reached or other payment arrangement made, youwill have to decide whether or not you wish to appear in court. It is very important to note that if a client fails to appear in court, a default judgment can be issued.

What is a judgment?

A judgment is the final determination of a lawsuit. If the judgment is made on behalf of the creditor, it could most commonly be enforced through garnishment of wages, attachment of bank accounts, or liens against non-exempt property.

Can a judgment be settled?

Yes. On occasion, judgments can be settled if there is an agreement reached with the creditor (or law office) and funds are available to fulfill the settlement.

How do I work in partnership with my debt settlement company or law firm to resolve a legal account?

Achieving a successful resolution to your legal account is really a collaborative process or partnership between you and your debt settlement company or law firm. Your debt settlement company or law firm  will act on your behalf and contact creditors to negotiate your debt in an effort to achieve a settlement. Therefore, clients need to make the agreed upon monthly payments that allow settlements to be fulfilled. When legal action has been taken, clients should provide their debt settlement company or law firm with as much information as possible about the summons they have received and should regularly update their debt settlement company with any new information received from creditors or from the Court. As always, clients should maintain regular contact with their debt settlement company or law firm.