What Can You Do if You Are Served with a Lawsuit?
Being served with a debt collection lawsuit is both scary and frustrating. Whether it’s a sheriff’s deputy or a hired process server, the feeling of dread and anxiety can be overwhelming.
After creditors have attempted to collect the debt owed to them many will file a lawsuit if this debt remains unpaid for several months. Once you are served with the lawsuit you typically have 30 days to file a response to the lawsuit. If you don’t do this then the creditor will obtain a default judgment against you.
Thousands of collection lawsuits are filed in Georgia every month. Although the pandemic temporarily stopped the process. Now that things are getting back to normal (somewhat), the courts are rescheduling debt collection hearings.
If you’ve been sued by a debt collector, chances are that you won’t even recognize the name of the collection company suing you. The reason for this is that the original debt has been sold to a debt collection company.
The debt collection industry is big — estimated to be a $12 billion industry in fact, and growing. There are literally thousands of debt collectors in the form of collection companies, law firms, and yes, even debt buyers.
Debt collection companies like NCO Financial, Portfolio Recovery, Midland Funding, LLC, LVNV Funding, PRA Receivables, and Cach, LLC sue thousands of people in the hope that consumers will not legally respond to their lawsuits. If no one responds to the lawsuit (in Georgia within 30 days of being served), these creditors will get a judgment by default and can start garnishing your wages and bank accounts shortly after.
You have a few options when you are served with a lawsuit:
- Do nothing and have a judgment entered against you.
- File a response to the lawsuit and contact the creditor and work out a repayment plan.
- File bankruptcy to stop the lawsuit and discharge the debt
How Does Bankruptcy Stop a Lawsuit?
When you file bankruptcy (either Chapter 7 or Chapter 13, an order called the automatic stay goes into effect prevents creditors from continuing any collection activity, including proceeding with a lawsuit. Has soon as your case is filed the creditor has to stop the lawsuit.
Which Lawsuits Will Continue After a Bankruptcy Filing?
Bankruptcy doesn’t help people avoid all legal actions. There are a few cases that will continue despite a bankruptcy case:
- criminal cases
- divorce and dissolution actions, and
- child custody and support cases
What Types of Lawsuits Will Bankruptcy Stop?
- a credit card balance
- collection for medical bills
- money sought for a breach of contract
- a financial dispute between business partners
- compensation for a negligence-related personal injury case, such as a traffic accident
- foreclosure action
- the collection of a deficiency balance for a car that was turned in or repossessed
You can check your local county court website for case information. Please note that not all Georgia counties are online to review court case actions but most are. Below is a list of the counties in the Northern District of Georgia with their court links:
Case Search – https://www.cherokeeclerkofcourt.com/mainpage.aspx
We invite you to contact us either online or by phone at 404-919-7296 to schedule a free confidential consultation to review your personal financial situation and what options we can provide to protect you from creditors. For additional information about bankruptcy please also check out our YouTube Channel which has up to date vlogs on issues related to personal bankruptcy.