It is surprisingly common for debtors to make the mistake of believing that their debt will be written off by a credit card company if they stop paying. Unfortunately, that is not what happens: The company will more often than not sell the debt to a third-party debt collection agency, whose sole purpose is to urge debtors to pay. Eventually, they will file a lawsuit against you on the grounds of non-payment.
If a collection agency files a lawsuit against you, do not panic!
7 steps to determine your ideal course of action
- Respond immediately – Once you receive a “summons and complaint” letter from the court, you must respond within the designated time of 20 to 30 days. Failing to respond will result in a default judgement, allowing the collection agency to impose liens, wage garnishments, interest and numerous other financial obligations on your account.
- Challenge the lawsuit – Ask the collection agency to prove their “standing,” i.e., right to sue, by providing evidence of the signed credit card agreement transfer. Oftentimes, the court case can be dismissed due to the lack of appropriate paperwork.
- Obtain proof – It is your right to demand to see the original signed document indicating the balance on your account up to the present day. Debts often change hands several times prior to being purchased by collection agencies, and access to original documentation may become lost.
- Statute of limitation – In Ohio, creditors have 6 years to sue after you missed your first payment. Once you indicate to the court that the statute of limitations has expired, the case will be dismissed.
- Consider a countersuit – If you can prove that the debt collector has violated provisions of the Fair Debt Collection Practices Act (FDCPA), not only will your case be dismissed but you may be awarded damages. Prior to taking this route, it is critical to obtain sound legal advice.
- Contact a lawyer – Legal professionals specializing in debt offer free consultations and will typically work with you for free if the collection agency has crossed legal limits. If you win your case, attorney fees are covered by the plaintiff. Being represented by a lawyer also makes the collector more responsive to an out of court settlement.
- File for bankruptcy – If you are being sued for a large sum or one debt out of many, filing for bankruptcy will protect you against the collection agency with the “automatic stay” provision.
Contact Sheppard Law Offices Today
Please note that most debt collection lawsuits are settled out of court, which is why it may be in your best interest to contact a dedicated bankruptcy attorney to help arrange the repayment of your debts. That way, you avoid the stress of litigation as well as excessive financial losses.
Have you had a collection agency sue you in Ohio? If so, we urge you to call or email bankruptcy attorney Kenneth L. Sheppard, Jr. at Sheppard Law Offices today!