FAQ About Being Sued By A Debt Collector In Alabama
What to Expect When You Are Being Sued — Questions and Answers Regarding Collection Lawsuits By Debt Collectors
(UPDATED DECEMBER 3, 2019) — So you have been sued by a debt collector (debt buyer). This could be CACH, Cascade, LVNV Funding, Midland Funding, Portfolio Recovery, Unifund, Velocity, etc. and you have been served with the summons. What do you do?
Or perhaps you are receiving letters from lawyers or non lawyers telling you that you are being sued — what do you do?
Our goal is to help you understand your rights under consumer protection and debt collection laws, so that you can take action now to increase your chances of being successful.
Bottom line is that it is possible to win the collection lawsuit filed against you, sometimes without hiring an attorney!
So never lose hope — instead know that you have excellent options. In fact you have five options when you have been sued.
Below are some frequently asked questions and answers about debt collector lawsuits for your information. (Note: we have a much longer series of questions and answers starting here. And the over two hour long video is here).
For a free confidential consultation with an experienced lawyer about your situation and your options, call us at (205) 879-2447 or fill out our intake form on our Contact Us page.
Facts about Debt Buyers (Debt Collector)
Q. What is a debt buyer/debt collector?
A. A debt buyer (also called a debt collector) is a company that claims to have bought a debt that you defaulted on and now it claims to own the debt. This is critical — there is a big difference in owning a debt and claiming to own the debt. If you get nothing else from this long article remember this — owning a debt and claiming to own a debt is not the same thing!
Q. Is it legal for a debt buyer/debt collector to sue me?
A. Yes – if it owns the debt. We have not yet seen a situation where a debt buyer can actually prove it owns the debt. But assuming it truly owns the debt, it is proper for the debt buyer to sue you. (However, even if the debt buyer owns the debt, if it sues you after the statute of limitations has expired, the debt buyer has likely violated the law.)
Q. Who are the lawfirms that normally file collection lawsuits against Alabama consumers?
What to Do If You Are Being Sued – Answering the Debt Collector Lawsuit
Q. Do I have to answer the lawsuit or can I ignore it?
A. If you ignore the lawsuit, the judge will most likely enter a default judgment against you in favor of the debt buyer.
Q. What is a default judgment?
A. A default judgment is where the judge rules that you owe the debt buyer everything the debt buyer claims against you.
Q. Why is a default judgment a bad thing?
A. It is bad for several reasons. A judgment can appear on your credit report for around 7 years. Bank accounts can be garnished. Your wages can be garnished (think about losing 25% of your paycheck). If you own personal property or real estate, it can sometimes be sold at a “sheriff’s sale” to pay off all or part of the judgment.
Q. How do I avoid a default judgment?
How Do You Actually File Your Answer In Court?
Q. I understand I should file an answer if I am being sued. How do I do that?
A. You can use the form that came with the lawsuit or contact us and we can send you a blank answer sheet that you can fill out after we have discussed your options. Another option is you can also submit a very simple typed or handwritten answer to the court. You want to make sure you identify the lawsuit and who you are and that you are denying (or whatever you choose to do) the collection lawsuit. Here is a video discussing filing a small claims answer.
Critical: you must file it with the clerk of the court and send a copy to the lawyer representing the debt buyer.
Q. I understand how to file the answer. What do I say in my answer?
A. We would have to talk with you about your own unique situation before we could answer this question. Typically, we point out that the debt buyer does not own the debt and our client does not owe the debt buyer. Also, if it is applicable, we normally put that the statute of limitations has expired. We do not recommend answering “I don’t have a job or any money” and we don’t recommend filing a counterclaim except in special circumstances.
The Collection Trial – What to Expect in Court
Q. After I file my answer, what happens next?
A. The court will normally set the case for trial. This may be in a month or six months depending on the court’s schedule. You should be notified by a letter or card from the court. If you don’t receive anything, it is a good idea to call the court (clerk’s office) and find out if your case has been set for trial. (We do have a comprehensive video and transcript covering what happens from start to finish in a small claims or district court collection lawsuit here).
Q. What happens if I miss my court date?
A. Normally, the judge will enter a default judgment against you – just the same as if you never answered the complaint.
What Happens at The Actual Trial of Your Case?
Q. What happens at trial?
A. The debt buyer is the plaintiff and must prove its case against you. The debt buyer will call any witnesses it has and try to introduce as evidence any documents it has to prove you owe the debt to the debt buyer. You can then show any evidence you have. You can also read a detailed article about trial in court.
Q. What if I know I owe the original creditor – such as Chase or Citibank, etc.?
A. The debt buyer has to prove that it owns the debt. We have seen times when two debt buyers claim to own the same debt! This is why a debt buyer must prove it actually owns the debt. You may admittedly owe money to the original creditor but you don’t owe money to the debt buyer unless it proves in its lawsuit against you that it truly owns the debt that you owed to the original creditor. We have not yet seen this happen.
Q. If I hire you, do I have to show up for the trial?
A. Each case is different but we normally don’t need you to be at the trial because you can’t testify to whether the debt buyer owns the debt. This is something that you simply have no idea about if Citibank really did a secret sale of defaulted accounts to Midland Funding, etc. You can’t testify about this.
Now, if there are things you can testify to that will help your case, we may want you to be at the trial. Also if you receive a subpoena from the company that sued you, then you need to show up.
Q. How do I know if I won or lost my case?
A. You win if the court dismisses the case with prejudice. You also win if the court enters a judgment in your favor.
If You Win the Collection Case – What Happens Next?
Q. Can the debt buyer file an appeal?
A. In small claims or district court, the debt buyer can file an appeal and start the trial over in circuit court. This can happen but is fairly rare in our experience.
Q. If I win at trial, will the debt collector’s account on my credit report be removed?
A. Maybe. It should be removed from your credit reports as winning the case (dismissal with prejudice or judgment for you as the defendant) means that you do not owe the money to the debt buyer. So, the debt buyer should automatically remove the account from your credit reports. This rarely happens. So to make sure it happens, we often sue the debt collector.
Q. If I win, can I ever sue the debt buyer for filing the lawsuit against me?
A. Normally yes. If the debt buyer sued you after it knew, or should have known, that the statute of limitations had expired, then yes you can often sue. If the debt buyer committed false credit reporting, then you can often sue. Now if the debt buyer filed what is known as a “shakedown” lawsuit — a lawsuit with no proof and no intent to prove — a lawsuit designed just to extort money from you — then we quite often sue the debt buyers.
So here is the bottom line — if you win your suit (the case is dismissed with prejudice or you win at trial) then you may have some options and you should find out your legal rights so you can take the right action.
We will be glad to help you discover your options.
Q. How much will it cost to talk to you?
A. Nothing. We don’t charge for initially talking with you on the phone or meeting with you in person to help you understand your options.
Q. What do you charge to represent me at the trial?
A. It depends, but in virtually every case, we can represent you for a flat fee. We have different levels of fees and we can help you see which is the best one for you.
If You Are Being Sued and Want to Take Action – Call Us
Q. I want to discuss my case with you. What do I do?
A. It’s simple — pick up the phone and call us at 205-879-2447 or you can also fill out our intake form on our Contact Us page.
Contact us today for a free confidential consultation, as every day that passes may be the final day that you can take action and protect yourself.
We can help make sure you are in a position to get what may be false information off your credit report and you may be able to let the debt collector face the consequences of violating the law in its lawsuit against you.
I look forward to talking with you.
Have a great day!