Your Survival Guide When Sued By Portfolio Recovery Associates (PRA)
Your Survival Guide When Sued By Portfolio Recovery Associates (PRA)
You have been sued in Alabama by Portfolio Recovery Associates (PRA) and you need to know how to survive this in the best possible way. That’s the point and purpose of this “Survival Guide” so read on to learn what to do to survive, and even thrive, when sued.
Being sued is not the same as having a judgment — you have not lost the case.
Big difference in being sued and losing. Many times when negative things happen to us — and being sued certainly counts! — we tend to immediately assume the worst will happen and then act like it already has.
That’s some strange time travel we do!
Here we are right now.
But we look into the future and say “What is the worst that can happen?”
Judgment by PRA against me.
So then we say, “This is what will happen.”
But then we tell ourselves it is not in the future, but is right now and then we say “Since I already lost, I’ll just do nothing.”
Being sued does not mean….
- Mean you owe the debt
- Mean you will lose the lawsuit
- Nor does it mean you should give up
It simply means you have been sued.
Don’t make this more than it is — you have options.
But only if you don’t give up right now by failing to respond . . . .
The biggest danger point for you is right now — failing to respond to the lawsuit and getting a default judgment against you.
Yes it is bad you were sued.
Yes in the future you might lose.
But you haven’t lost yet and may never lose.
Unless you do nothing — then you will definitely lose.
The biggest opportunity for PRA, and the biggest danger for you, is to do nothing. Because then PRA will get a judgment against you.
This is called a default judgment and it means you failed to do anything — you defaulted — and now there is a judgment against you.
“So how bad is a default judgment?”
It is a real judgment — don’t believe any nonsense you read on the internet or that friends or family tell you — a default judgment will get your bank account wiped out, 25% of your wages garnished, and can result in your car or home or other property being sold to pay this default judgment.
“So what’s the solution?”
Sued in district court? 14 days after served is your deadline.
How about small claims court? Take the day you were served and your answer is due in 14 days from when served.
What about if you were sued in circuit court? You have 30 days from when you were served to file your response.
Don’t know how to file an answer or if you should settle? Examine your five options quickly to decide . . . .
Learn your rights — you have five (5) options now.
You have five basic options:
- File bankruptcy
- Fight the lawsuit on your own
- Settle the lawsuit on your own
- Hire a lawyer to fight the lawsuit for you
- Hire a lawyer to settle the lawsuit for you
But which option is the best for you?
Easiest way is to talk to a lawyer who knows about all five options. You can do that if you live in Alabama by calling us at 205-879-2447 or you can read on and get more information before you call us. So let’s look at these options — all five of them . . . .
Decide which of the five options is best for you.
First Option — File bankruptcy
This is the extreme option — normally not appropriate but when absolutely necessary it is extremely effective. Think of this as amputation.
You only do it when you have no alternative.
It destroys your credit report and score for quite some time but if you qualify it does have the advantage of wiping out the PRA debt and other secured and unsecured debt.
Talk to someone who can tell you whether this extreme option is necessary — and remember the old story of the man holding a hammer — everything looks like a nail. The same can be true of lawyers who only file bankruptcy. They can start to view every problem as being solved with bankruptcy even though there normally will be much better options available.
Find out why you need to file bankruptcy and is the cost (now and your long term credit) worth the benefit and can you get the benefit from one of the other options.
To be clear — I am not a fan of bankruptcy but I occasionally refer people to bankruptcy attorneys when it is necessary. Just make sure it is necessary before you do a life altering move like bankruptcy.
Second Option — Fight the lawsuit on your own
I like this one in the right circumstance.
You file your answer in the time limits discussed above.
You get your trial date (and maybe some other activities before then) and then you try your case.
If you are in the right court — small claims or district — this can be a great option. Usually circuit court is too complicated to fight PRA without a lawyer.
You will be saving money — no lawyer fee.
The downside is you won’t have a lawyer to help you.
So you save money and you will need to spend time. This is true of most things in life.
You have a choice — keep your money and spend your time or spend your money and keep your time.
A few examples of how you need to consider spending your time if you want to fight the PRA lawsuit on your own:
- Read materials on what is likely to happen in a trial;
- Go to court and watch your actual judge — not anyone else — handle civil lawsuits filed by PRA or Midland Funding or other debt collectors. Get a feel for the courtroom. Get a sense of how formal, or not, the judge is. So that when your time comes to try your case, you will be as comfortable as possible.
We have had many clients choose this approach and then hire us after they have beat PRA in order for us to sue PRA in federal court for violating Alabama state law and the Fair Debt Collection Practices Act (FDCPA). So if you choose this option, feel free to contact us after you win so you can see if you are entitled to money damages against PRA.
But what about settling with PRA on your own? Read on to find out more about this third option . . . .
Third Option — Settle the lawsuit on your own
You can always try to settle your case so it does not go to trial.
Two basic options in settling on your own:
- Pay a lump sum to settle; or
- Make monthly payments to settle the whole debt.
Normally this will be between 50-75% of the amount you were sued for, paid all at once (lump sum).
The advantage is you get the case over with immediately upon paying.
Disadvantages include you will still have negative credit reporting, you could get hit with a 1099 for debt forgiveness and have to pay taxes on it, and you will given up a considerable amount of money.
Normally PRA will agree to payments made for 1-3 years to pay off the debt.
Do be careful about agreeing to a “consent judgment” — something I rarely think is appropriate and never with a debt buyer. There is no need to have a judgment — you can simply have an agreement to pay the agreed upon amount over time. Most courts will let you do this — it is called the “settle/pay” docket or something similar to this.
Just like the lump sum, this will still remain on your credit report and you are going to be paying the full amount sued for so keep this in mind.
But what if you are not a “do it yourself” person when it comes to a lawsuit and you want to hire a lawyer? You have two choices — hire a lawyer to fight or settle. Let’s start with a lawyer to fight the lawsuit for you . . . .
Fourth Option — Hire a lawyer to fight the lawsuit for you
You hire the lawyer. The lawyer files your answer and handles whatever else is involved in the case.
Then your lawyer goes to trial.
I’ll explain how we do this. You can also read a series of short articles where we walk you through step by step from beginning to the end of your debt collection case.
We electronically file your answer in court and send you a pdf (or hard copy — your preference) that shows you the answer was actually filed so you will be able to rest easy.
Then at the time of trial, we do NOT want you to be at court unless you have been subpoenaed. Unless we need you there to prove an affirmative defense, we will let PRA see if it can prove you owe the debt and PRA owns the debt.
We have not yet seen this happen.
The objective is to win the case so we have a judge’s order saying you do not owe PRA any money on this debt.
When that happens, then we look at suing PRA in Federal Court for violating Alabama state law and the FDCPA.
The disadvantage of hiring us to represent you to fight the lawsuit is this costs money. It can range from $1000 to $10,000 in fees but we almost always make it where you can hire us for the same or less than what you can settle the case with PRA for so you will have a real choice.
The advantage is you would expect to have a better chance of success having a lawyer represent you than representing yourself. We have been fighting PRA for many years and face them in state court (small claims, district, and circuit court) and also in federal court when we sue PRA for damages.
But maybe you want to know about hiring a lawyer to help you settle the case? Read on then . . . .
Fifth Option — Hire a lawyer to settle the lawsuit for you
This is where you hire a lawyer — us or someone else — to negotiate a settlement with PRA.
We have a very simple approach to settlement:
- Case is dismissed with prejudice
- PRA removes the account from your credit report
- You pay PRA no money
Many people find this to be extreme but this is what we do in PRA cases. You see, we actually only accept cases where we have authority to do this or to try the case. We don’t pay PRA any money so if you want to pay PRA money, you’ll need to do it on your own or hire someone else.
We give PRA a simple choice — settle with our terms or let’s go to trial.
It is not unfair — after all they sued you so PRA should be happy to go to trial, right?
I can’t speak to how it works with hiring a lawyer that pays PRA because that is not our approach but if you want that, then find out the cost to settle, the amount of the attorney fee, what happens to your credit report, will you owe taxes, etc.
Take action on the best option for you right now.
Here’s the bottom line — you must take action. So think about these 5 options — call us if you want help thinking through them — and then pick one.
Pick one and be enthusiastic about it. No regrets.
If you hire us then we want you to say, as we have been told before, “That was the best money I ever spent in my life.” We want and expect you to be thrilled with not only the results but also the experience of being our client.
If you handle it on your own, learn what to do and be decisive about it.
However we can help you — figuring out the best option for you or hiring us — call us at 205-879-2447 and we’ll be glad to set up a call or video chat or in person meeting for your case with PRA anywhere in Alabama. Or you can contact us through this website and we’ll be glad to get back with you ASAP.