Collections Lawsuit: The sheriff just served me a summons. What should I do?

As an Asheville bankruptcy attorney, I speak with many clients soon after they get served by the sheriff with a collections lawsuit.  Although a collection lawsuit can be intimidating, many times clients can defeat the action by taking the appropriate action either in bankruptcy court or through the state court proceeding.

When served, take action to find peace again

When served, take action to find peace again

If Served, You Still Have Rights

You usually have 30 days to respond with an “Answer” after being served with a complaint in district or superior court.  Many times, if the debt is owed, clients achieve a better outcome by protecting their assets rather than contesting whether the debt exists.  In that case, a client may choose not to answer the complaint.  The creditor would then be issued a “default judgment,” which is a court order indicating the money is owed.

The default judgment can help the creditor collect the money owed.  However, wage garnishment on simple unsecured debts (mainly credit cards, medical debts, personal loans, repossessions, etc.) is not permissible in North Carolina.  Seizing assets is also more difficult because consumers have a right to protect a significant amount of their property by claiming their exemptions.  The creditor is required to serve you with a “Notice of Right To Claim Exemptions,” before trying to execute on any property to satisfy a default judgment.

Rights in Bankruptcy

The collection process can be halted immediately with the filing of a bankruptcy case via the “automatic stay.”  Most of the time, the creditor will file a voluntary dismissal when they get notice of a bankruptcy case which discharges your responsibility to pay that debt.   

Getting served with a collection lawsuit can be intimidating and annoying.  It is an indication of bigger financial issues which could be addressed by the advice of a qualified bankruptcy attorney. For those of you in Western North Carolina, I would be happy to speak with you during a free initial bankruptcy 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.