When you have unpaid debts, creditors may resort to pursuing a lawsuit against you to collect. Not all creditors have the option of pursuing this legal remedy, but in many cases, the creditor can obtain a judgment against you that may include wage garnishment.
Debt collection lawsuits begin when the collection agency or creditor files a complaint with the court. The debtor will be served with the complaint, and they’ll need to respond to it.
Responding to Debt Collection Lawsuits
Receiving a summons to appear in court for a debt collection lawsuit can be very intimidating. If you’re served with the papers in person, no response is needed to confirm that the summons was served.
If you received the papers in the mail, the creditor may require you to sign and return a form stating you were served with the information. Most often, you’ll have about 20 to 30 days to formulate a comprehensive written response to the pending lawsuit.
This written answer will be your response to the claims levied against you. Here are important things to include in this formal response:
- Potential creditor violations
- Any potential defenses to the lawsuit
- Filing fee or fee waiver form
Debt Collection Lawsuits and Bankruptcy in Camden, NJ
If you’ve recently filed for bankruptcy or are planning to file for bankruptcy, then it’s important to note this in your response to the lawsuit. You still need to respond to the lawsuit because failing to respond may result in a default judgment against you.
In short, bankruptcy proceedings stop the majority of lawsuits against you. During bankruptcy proceedings, a court will order an automatic stay to prevent creditors from attempting to collect from you. This automatic stay applies to collection efforts including:
- Calling the debtor
- Sending bills to the debtor
- Attempting to pursue a lawsuit against the debtor
- Wage garnishment
Automatic stays don’t apply to non-dischargeable debts or instances of fraud. When the lawsuit was already pending prior to filing for bankruptcy, then both parties may choose what to do. The creditor may either dismiss the suit, ask for permission to continue the suit, or move the entire issue to the bankruptcy court.
Contact a Central & South Jersey Bankruptcy Attorney for a Free Consultation
If you’re struggling with debt, you may need a fresh start financially. An experienced bankruptcy and debt relief attorney can help you explore your options and determine the best course of action for you, your family, and/or your business.
The experienced New Jersey bankruptcy lawyers at The Law Office of Joel R. Spivack understand the nuances of NJ and federal bankruptcy laws, so we can help you protect your interests.
Call us anytime at 856-488-1200 or fill out the online contact form to schedule a confidential consultation. We have an office conveniently located at 1415 Marlton Pike East, Suite 302 Cherry Hill, NJ 08034.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.