FAQ About Being Sued By A Debt Collector In Alabama


What to Expect When You Are Being Sued — Questions and Answers Regarding Collection Lawsuits

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So you have been sued by a debt collector (debt buyer) — Asset Acceptance, CACH, Cascade, LVNV Funding, Midland Funding, Portfolio Recovery, Unifund, Velocity, etc. and you have been served with the summons.

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.

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?

A.  Zarzaur & Schwartz is the one of the largest lawfirms along with Holloway & Moxley, Nathan & Nathan, Parnell & Crum, and others who file these lawsuits.

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?

A. Answer the complaint in the time allowed by law! In small claims and district court, you have 14 days from when you are served. In circuit court, you have 30 days from when you are served.

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.

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 expiredWe 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.

[Bonus — we have a popular 30 minute video and transcript laying out the overview of the entire lawsuit process when you have been sued in small claims or district court].

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.

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. We do not consider it a win if the court dismisses the case without prejudice as you could be sued again on the same debt.

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.

Lawyer Fees

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!

John G. Watts


22 Comments

  1. […] Remember that the defendants LVNV and the Budzik lawfirm will deny the allegations in this lawsuit.  It is our burden to prove what we have alleged — just like it is the burden of LVNV when it sues Alabama consumers to show that the consumers owe a debt to LVNV. […]

  2. michael morell says:

    Can you recommend an office like yours in Arizona? Thank you.

  3. Bradford says:

    John Watts is a man I trust whole heartedly with any decisions or advice regarding my safety & protection as a consumer.

    John empowers me to be confident that as a consumer there are many rights and actions available to me. Making the decision to acknowledge these rights are responsibilities that we, as consumers, must be accountable for.

    It is a rare circumstance these days to find an individual like John Watts – his intent is genuine advocacy & consumer awareness.

    I have personally seem this demonstrated through his stoic pursuits in litigation on my behalf.

    Thank you John (and Randi) for your continued hard work.

  4. JoAnn says:

    After the lawsuit is filed, can the debt buyer then have another attorney besides the one listed send you letters trying to collect?

    • JohnGWatts says:

      JoAnn,

      If it is a lawyer in the same firm that sued you, that’s fine, assuming the lawsuit is still going. (If you have won your lawsuit then you should not get any collection letters on the debt.)

      If it is a different lawyer, then it is still fine as long as you don’t have a new firm claiming you owe the debt to the second firm.

      If you can describe for me what has happened and I’ll be glad to do my best to answer your question.

      Thanks!

      John Watts
      Birmingham, Alabama

  5. Cindy says:

    Do you know of a lawfirm such as yours in Oklahoma?

    Thanks!

  6. Paul says:

    I am being sued by a firm in AL representing AMEX. It is in the court system, have not received a court date as of yet. The firm is wanting me to sign a consent judgement and at the same time by them 10% of the balance I owe and agree to a $200 a month payment. Not exactly sure how to approach this. Can you offer any advice?

    • John Watts says:

      Paul,

      Give us a call at 205-879-2447 and we can help you think through your options.

      I am NOT a fan of consent judgments. This is a real judgment against you if you agree to it. It means this can show up on your credit report as a judgment. http://www.alabamaconsumer.com/2014/02/why-did-the-collection-lawyer-send-me-a-consent-judgment-and-what-does-it-mean/

      It may be the best thing to settle with AMEX but usually you can do this without a consent judgment, even without a lawyer.

      Let’s talk — call us at 205-879-2447 and ask for Carolyn — she can set us up with a quick call to go over your options. Let her know we have been chatting on the website and she’ll get you in with me as soon as she can.

      Thanks for your comment and I look forward to talking with you.

      John Watts

  7. Francis says:

    Can you recommend an office like yours in Louisiana

    • John Watts says:

      Francis,

      I’m sorry I don’t know of anyone specifically but I’ll check around and email you privately.

      Thanks

      John

  8. Cynthia says:

    Estranged spouse awoke to find a large amount of money missing from his paycheck. He was clueless and called human resources who told him his wages had been garnished to the tune of 25% of his take home pay. This is in the state of Alabama. He knew NOTHING about the garnishment or what had been filed so a trip was made to a county courthouse to get ALL of the paperwork filed by the bottom feeder lawyers out of Birmingham called Zarzaur and Swartz. This was over a judgement from another state (that state does not allow wage garnishments) that this same group filed to bring the debt into AL (and debtor was not aware) Oddly, the person owing the debt came to AL to help during a shortage of personnel for his company. For a brief time he stayed at a campground in a camper as he did not know if he would be there permanently or temporarily. This bottom feeding law firm appears to operate by finding an OLD address and they do not practice due diligence in finding the debtor’s current address. Oddly, mail sent to the person owing the debt was returned not only to the bottom feeding lawyers but also to the court! It is documented in the case file! And what did the court and the bottom feeders do? They continued to use to wrong address even though they knew the debtor was not being notified. Some paperwork shows the correct address and they did not bother to use it! I am shocked that the court system would participate in this and allow them to proceed to garnishment of wages when BOTH the court and the bottom feeder lawyers knew the debtor had never been notified. SInce papers in the file gives a correct address so what did they not use it? They did it on purpose so that the debtor could not show up and contest their filing and so they could win without the debtor knowing. Does this not amount to fraud on both the part of the law firm and the court system? Again, well documented they were using an address where the mail was returned to them but neither did anything to correct or find the correct address. So they proceeded to garnishment and it was allowed even though the record shows the debtor never got any notice. The judgement was contested in NC and that lawsuit and result is not mentioned in their filing. The debtor has other court ordered payments that were ordered years before the judgement and they are not mentioned. But my comment here is about lack of notice of garnishment…by anyone and the continued use of a wrong address even though the file documented the address was wrong right away! So now does he fight these bottom feeders? He is not sure if he is a permanent resident of AL since he still returns to work in NC. His wages are paid out of PA. He can file bankruptcy and probably will since he supports and disabled family member and AL may not recognize that requirement but it will in bankruptcy. He is leaving his company and taking a new job in NC also. It is tempting to fight them here in AL based on total lack of notice by all and go forward with the supporting a disabled family member. A grandmother was recently allowed to claim the money she was paying to raise her granddaugter in her exemptions in Alabama so perhaps this would be a ground breaking case to show that persons who support disabled family members (this is also documented in a previous court document also with the amount required) should be allowed to claim that in their exemptions. HE would fight it all the way to the court of appeals if needed. This is not a case of someone running from a debt. It is a case of a family with two kids that lost everything when one family member suffered a traumatic brain injury. Just beware that these bottom feeder lawyers operate by finding an obscure address (four years old) and do not practice due diligence in correcting the address. The court lets them get away with it so is the clerk getting a cut of their funds? There is NO documentation of how they came up with the amount owed and there is NO documentation that they represent the lender. Just seems like fraud on initial appearance by the court and the bottom feeding lawyers. Lastly when TWO names are on the judgement how in the world are they allowed to just attack one person? Bankruptcy will probably be the best route but it is tempting to blaze a trail for those that support disabled family members. This amount should be allowed in the list of exemptions when there is a court document that even proves this! Alabama you suck! I know he wishes he had never offered to help out in Alabama during their shortage. Again, he does not know if he is even a permanent resident.

    • John Watts says:

      Sorry he is going through all of this.

      It is frustrating when the wrong address is used.

      If he wants to talk about fighting this in Alabama have him call us at 205-879-2447 and ask for Carolyn. She can look up his case and see what has happened and then we can chat about it.

      I know this is incredibly frustrating — easier to talk by phone as lots of issues raised in your questions. And things get more complicated when there is a judgment in one state and then it is “domesticated” into Alabama.

      Thanks for sharing your experience and if we can help in any way we’ll be happy to do so.

      John Watts

  9. Christy says:

    Thank you for the excellent information and videos you’ve created! If I lived in Alabama, I would definitely hire you. Can you recommend a knowledgeable and skilled attorney in North Carolina who does what you do? I’d like to talk with someone who can discuss filing bankruptcy versus suing debt collectors.

    • John Watts says:

      Christy,

      Thank you for your nice comments — glad they have been helpful.

      I don’t know any specifically in North Carolina but I would search “North Carolina lawyers consumer protection” and then see if they appear to have knowledge/experience in the FDCPA (Fair Debt Collection Practices Act) and bankruptcy.

      I think that would be the best approach.

      Best wishes!

      John Watts

  10. Christy says:

    Thank you, John!

  11. Rodolfo Gonzalez says:

    Can you service people in other states. Not in court exactly but just giving consultant or other service?

    • John Watts says:

      Rodolfo,

      Thanks for your comment.

      If it has to do with a debt collection lawsuit the answer is no. These suits are so unique to each state that we only chat with folks in Alabama.

      But if it has to do with a potential FCRA (Fair Credit Reporting Act) or FDCPA (Fair Debt Collection Practices Act) etc case then yes. Either to work with your local lawyer in a suit in your state or sometimes (when allowable) we bring the claims in Alabama courts.

      So it really depends on what the issue is.

      Feel free to send me a message through our contact form here and I’ll help you any way I can.

      Thanks

      John Watts

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