I was served with a collections lawsuit. What can I do?

Many clients wait until they get served by the sheriff with a collections lawsuit before calling a lawyer for advice. The awful knock on the door inspires fear and more stress about a client’s trouble. My initial reaction when fielding such a desperate call is, “Do not panic, we can go over your options and figure out the best response for you.”

A collections lawsuit that is served by the sheriff does not mean the sheriff is going to come back to take your property or haul you off to jail. Both of those two things may be hinted at by collections agencies (often illegally), but neither is going to happen because of a lawsuit.

After a complaint is served, you generally have 30 days to respond to the complaint and explain why you do not owe on the debt. Most of the time, the debt is owed. If you do not respond to the complaint, the creditor can get a default judgment which is a court order that indicates you owe the money. This judgment can help the creditor collect the money owed through wage garnishment or seizing assets depending on your circumstances. Collecting in this manner, however, is another legal process which will take additional time after the court awards the creditor a default judgment.

The good news is that the process can be halted immediately with the filing of a bankruptcy case.  Most of the time, the creditor will file a voluntary dismissal when they get notice of our case.   

Getting served with a collection lawsuit is not the end of the world. It is, however, an indication that you should determine your best course of action by seeking the advice of a bankruptcy attorney. For those of you in Western North Carolina, I would be happy to speak with you during a free initial consultation.

*The information contained on this website is not intended and does not constitute the providing of any legal advice or any legal opinions or services to any user thereof. The information available on or through this web page is not intended and shall not be used as a substitute for the advice and consultation provided by an attorney.  Any factual examples used to illustrate concepts are hypothetical and do not depict actual events or real persons.