5 Ways To Shut Down a Creditor Trying to Sue You – Wilmington Consumer Tips

Facing a debt lawsuit? Wilmington consumers tips

Image by Sebastian Pichler via Unsplash

Struggling with debt is no one’s idea of fun. It’s bad enough if you’re living paycheck to paycheck while scrambling to pay bills but when debt collectors are in the mix, it can ruin your quality of life. Debt collection harassment can be brutal, and some break the law by making threats of arrest and other outrageous claims. One thing that collectors can do is sue you if you’re delinquent – but there are some things you can do if a creditor is suing you – check out these Wilmington consumer tips.

Don’t Ignore the Lawsuit Notice

If you’re just getting letters from the creditor threatening to sue, that’s one thing, but once the papers are filed, you can no longer ignore the issue. Your knee-jerk reaction may be not to show up because you can’t afford to pay, but that’s the worst thing to do.

By not showing up in court and not filing a response to the lawsuit, you open yourself up to a default judgment. In addition to the debt, the creditor can request attorney fees, court costs, and interest, which can double or triple the amount of the judgment.

You should respond to the summons and complaint filed against you within the period specified on the notice from the court. If the balance owed is wrong, list that. If you think the debt isn’t yours, mention that. Force them to prove what you owe.

If the case moves forward after your response, you should show up to court and explain why you can’t afford to pay. If you’re out of work, ill or were in an accident and overwhelmed by debt, explain that. The creditor may abandon the claim, or the judge may throw it out because it’s uncollectible.

Negotiate With Your Creditor

When creditors and debt collectors file a lawsuit, they do so thinking that you have assets or the ability to pay but are choosing not to. They may also file because you’re not communicating with them and they think there’s still a chance for payment.

Try the direct approach. If the suit is filed by a debt collector, go back to the original creditor and tell them why you didn’t pay and offer to settle the debt for a lesser amount. If they sold the debt to a collector, you could try the same approach with the collection firm. If you settle, it stops the suit.

Dispute the Debt

In many instances, the debt collector (or even the original creditor) won’t have adequate documentation to support the debt they’re alleging you owe. The debt might have been sold to a collector without the appropriate paperwork.

You can challenge their legal right to collect the debt. If they’re threatening to sue but haven’t filed yet, contact the debt collector in writing and ask them to submit proof of the debt. If the suit was already filed, ask the court to require the collector or creditor to prove the debt and balance.

Remember the Statute of Limitations

Also, be aware of whether the statue of limitation on the debt has lapsed. In Wilmington, North Carolina and elsewhere in the state, the statute of limitations on most debt is three years from the date of your last payment (i.e., the date the debt went delinquent).

If you believe the statute has expired, that’s a valid reason to boot the case from court. However, if you made even one small payment, the statute clock restarts. Be careful not to make a payment of any amount on an older debt, or you could give it new legal life.

File for Bankruptcy

Another way to shut down creditor lawsuits is to file for Wilmington bankruptcy protection. As an individual, you can file either Chapter 7 or Chapter 13 bankruptcy. When you do so, the automatic stay on debt collections should shut down most debt lawsuits still in process.

To find out more about the benefits of North Carolina bankruptcy to stop debt collectors from suing and harassing you, contact the Law Offices of John T. Orcutt. Read reviews from our satisfied clients and then call +1-833-627-0115 now for a free Wilmington bankruptcy consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro or Wilmington.