Sued by Capital One in Alabama Small Claims Court? Discover answers to Your questions now.


Sued by Capital One in small claims court in Alabama? Read FAQs.

When sued by Capital One in Small Claims court, which direction do you take? Find out answers to your questions now.

You received a copy of the small claims lawsuit by Capital One and you are wondering, “What do I do now?  What are my options?”

We have represented countless folks all over Alabama who are sued by Capital One.  From our many years of representing people in every type of court in virtually every county, we have learned a few things.

Here are the questions that are probably going through your mind right now.  Warning:  This article is lengthy but worth it if you are trying to figure out what to do.

Here’s what we’ll cover:

  • What is a Capital One lawsuit in Small Claims court?
  • Who is the collection law firm suing me?
  • What does it mean to be served?
  • How long do I have to answer (respond to) the lawsuit?
  • What happens if I don’t answer the lawsuit in time?
  • How quickly will my case be set for trial?
  • Is bankruptcy my only option?  (Hint:  NO!)
  • Can I fight the lawsuit?
  • Can I settle the lawsuit?
  • If I settle, can I do this on my own or do I need a lawyer?
  • Do I pay a settlement now or over a period of months?
  • Are there tax consequences to a settlement with Capital One?
  • What happens with my credit reports?
  • If I want to hire a lawyer, how do I do this?

What is a Capital One lawsuit in Small Claims court?

This is where Capital One is saying that you owe it money and it is suing you for up to $6,000.

(If a suit is over $6,000 it will be in Alabama District Court or Circuit Court).

The lawsuit is also called the “Complaint” or “Statement of Claim” and you will receive a “Summons” which tells you to make sure you respond to the lawsuit in time.

Who is the collection law firm suing me?

Typically it is one of two firms.

Nathan & Nathan is a large collection firm in Alabama.  They handle cases all over the state and are based out of Birmingham.  These guys have many years of experience in Alabama handling Capital One suits.

The other firm is Scott & Associates out of Texas.  They are newer to Alabama and have an office in Montgomery.  While they haven’t been in Alabama a long time, this is an experienced collection firm.

It is possible that you could be sued by a different firm but normally it is one of these two collection lawfirms.

What does it mean to be served?

This is where the lawsuit (the complaint/summons) is given to you.  Basically three ways this can happen:

First, you can be handed the papers.  So a sheriff’s deputy or process server literally gives you the lawsuit papers.

Second, the papers can be given to an adult who lives with you.  Not a relative spending the night but a resident of your home or apartment.

Third, you can be served by receiving the papers by certified mail.

There are exceptions but the above is how the vast majority of Alabamians are served with a Capital One lawsuit.

How long do I have to answer (respond to) the lawsuit?

We start counting the days from when you were served (see previous section).

If you are sued in Small Claims court (most Capital One suits are here) then you have 14 days from when you were served.

While this article is specifically about Small Claims suits, if you were sued in District Court — you also have 14 days from date of service.

But if you were sued in Circuit Court then you have 30 days from the date you were properly served.

What happens if I don’t answer the lawsuit in time?

Capital One will ask for a default judgment against you.

Default judgments are when you don’t respond in time so you “default” or “give up”.

Many people mistakenly think of default judgments as not real judgments.  This is wrong.  A default judgment is absolutely a real judgment.

Real judgments go on your credit reports.

They let a company like Capital One garnish your wages up to 25%.

And wipe out (garnish) your bank accounts — taking every last penny.

Default judgments also can lead directly to your property being seized and sold at a sheriff’s sale.  I’m talking about personal property and real property such as your house.

Finally, judgments make interest every year so the amount you owe goes up.

So you know not to allow a default judgment — what are your options?

How quickly will a trial be set in my Small Claims Capital One case?

Normally in about 30-45 days after you answer.  This is incredibly quick in the legal world.  For example when we have jury trials those may not get to trial for 12-36 months.

But small claims cases move very fast so be prepared and make sure you know the trial date so you show up if you are trying your case.

Is bankruptcy my only option?  (Hint:  NO!)

No.

Occasionally (rarely) a default judgment is a good idea.  But this is very unusual.

Think of it this way — a bankruptcy is for life.  It is a life altering event.

Only use this extreme option when no other options.

Let’s see what else you can do.

Can I fight the lawsuit?

Yes but it is difficult unless the debt is from ID theft.

Capital One hires very good lawyers to handle its lawsuits.

We have beat Capital One a good number of times in trial but you certainly take a risk with that approach.  You have to have the right facts and be able to make the right arguments to win.

So it is possible but not likely that most folks will be successful in fighting Capital One in court.

Can I settle the lawsuit?

Yes normally Capital One is interested in settling with you.

If I settle, can I do this on my own or do I need a lawyer?

Either way.

Here are the advantages and disadvantages.

On your own

You pay nothing for a lawyer so that’s the advantage.

The downsides include:

  • You don’t have a lawyer to help you
  • You are responsible for filing your own answer
  • All negotiations on the amount of money will be done by you
  • It is your responsibility to make sure you have everything in writing
  • You need to verify that the case is dismissed with prejudice when the settlement is complete
  • What about credit reporting?  You need to know what will happen before and after a settlement.
  • Will you get as good of a deal as you would if you hired a lawyer?
  • Everything is on you

For some folks this is a good choice because you save money.  Others will consider hiring a lawyer which has its own good and bad parts.

Hiring a lawyer

The disadvantages are:

  • How do you find the right lawyer for you?
  • Will the lawyer file the answer in time in your case?
  • You have to pay the lawyer so you have to factor this into the total cost of settlement

The advantages include:

  • You reduce the number of decisions — now you only hire the lawyer and the lawyer handles the rest
  • The lawyer will do the negotiating for you
  • All paperwork is handled and reviewed by the lawyer
  • You may get a better deal than handling this on your own
  • The peace of mind having a lawyer take care of this who has dealt with Capital One many times

Ultimately it comes down to your preference — do it yourself or hire someone to do it for you.

Do I pay a settlement now or over a period of months?

Either way.

Lump sum settlements where all the money is paid now, are “cheaper” in that you pay less money.

But you have to give up your money now and you may not have that money.

So monthly payments are an option but you will need to typically pay the full amount when you do it over time.

No right or wrong answer — you just have to think it through and decide what is best for you.

Are there tax consequences to a settlement with Capital One?

Maybe.

If you pay less than what you owe, then Capital One will very likely report the “forgiven” amount as taxable income.

But normally the amount you save compared to what you may pay in taxes is a good deal.  (There are rules when you pay and when you don’t pay taxes on forgiven debt — often has to do with whether you are positive or negative in your net worth).

Taxes should not be the driver in the decision but you do need to be aware of it.

What happens with my credit reports?

If you do a lump sum settlement, your credit report should show a zero balance on the Capital One account.

If you pay over time, then when you are done, it should say “zero” balance.  And as you pay it, normally the current balance will go down.

Either way, often your account will say “Settled” or “Settled for less than full balance”.

If I want to hire a lawyer, how do I do this?

Here’s how clients hire us.  We try to make it as easy as possible because you do not need any added stress to your life right now!

First, you chat with us by phone at 205-879-2447.

We can meet in our office but it is much more convenient to talk on the phone for 99% of our clients.  Even though my 13 year old may not fully understand this, phones work great for actual calls so let’s use these smart phones to actually talk on.  🙂

We help you understand your options and if you want to hire us, we tell you the exact cost to hire us and what we believe we can settle the case for.  Or if we are fighting the lawsuit to trial, what that cost will be.

Second, we send you a simple plain English contract that you can sign on your phone or computer.

We use “Docusign” which is very easy — no downloads.  No creating an account.  It is a piece of cake to use.  We love Docusign!

Third, you can pay us by mailing a check or you can pay online which is what 97% of our clients do.

No charge to you and it is very simple to use — we use a service called “Lawpay”.

Fourth, we file an answer for you and send that to you by email and/or mail.

We file everything electronically so we can file an answer no matter what court you are sued in.

Fifth, we reach out to the Capital One lawyers about settlement.

(Or we tell them we are trying the case).  We negotiate and get you the best settlement we can.

Sixth, if we settle, we verify this in writing.

So there is no doubt what will be happening and when it will be happening.

Seventh, we complete the settlement.

Make sure the payment gets to Capital One and then make sure they do what they promised to do.

Eighth, we make sure the case is dismissed with prejudice and send you a copy of the order.

This is the order you are looking for — it means the case is over.  Done.  Finished.

Ninth, we help you verify that the credit reporting is accurate.

If not, we help you fix it in the right way and the right time.

What should you do right now?

Couple of things:

  • Make sure you know whether you were served
  • And when you were served
  • Go through your options
  • Pick out the best option for you
  • Then take immediate action!

We are happy to help you think through your options — easiest way is to pick up the phone and call us at 205-879-2447.  Ask for Carolyn.

Or fill out our contact form here and we’ll get right back to you by a call, email, or text.

No charge or obligation when you call.  Instead we will have a friendly discussion where we answer your questions.

Thanks and talk to you soon!

John Watts

PS — I know it can be overwhelming to be sued but make sure you don’t delay.  Instead take action right now.  You do have options.  And even if we can’t help you directly we can help you think through your options on handling this on your own.  Call us now at 205-879-2447 and you’ll leave the call knowing a lot more and feeling much better.

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