We can help either way. Click on the Articles button on the menu bar above to go to publically available videos and articles,
© 2025 Your Legal Leg Up, All rights reserved
Tag Archive for: default
Do I Respond, How do I Respond, What do I Respond
DO I Respond, HOW do I Respond, and WHAT do I Respond when Sued for Debt?
We talk elsewhere about what constitutes valid service of a lawsuit, and you should check out that video and article if you have any questions about whether you’ve been served. That makes a large difference in what you should do, and if you have been improperly served, you likely will not want to “answer” the suit at all and may instead want to “move to quash” the suit.
We also discuss elsewhere whether you should respond to a debt collection lawsuit you find out about if you have not been served the complaint. To boil that down to its most essential point, if you have not been served at all – you hear about the suit from a neighbor or look your name up in court files, or a lawyer sends you a letter saying you’re being sued – we usually suggest that you take no action if you don’t have a lawyer. If you do have a lawyer, and the lawyer thinks it’s best to get on with it, that might be a good idea, but as a pro se defendant you won’t be able to shut the case down the way a lawyer might.
Let them serve you if they can, but you have no obligation to help with that process. You don’t have to go down to the sheriff’s office or call the firm suing you or its process server. See if they can get you, and if they can’t the case will be dismissed against you. It actually happens a lot, although not a statistically huge percentage of cases.
If you go this route, you will want to keep an eye on the court files to see if, whether or not they HAVE served you, they claim to have served you, and that brings up a special issue that we discuss elsewhere, too.
If you are Served the Suit
If you get served, your next question will be HOW to respond. If you fail to respond at all, the other side will get a default judgment and start trying to get your stuff, so this is probably not a good idea for you. You’ll need to Answer or file what’s called a motion (in some jurisdictions, like California, you could file what’s called a “demurrer,” which is just another kind of motion). To answer this question, you should first consider what kind of court you’re in. Are you in a small claims court, sometimes called a “magistrate” court? Or are you in a “real” court?
If you’re in a small claims or magistrate court, see our video and article on that.
Assuming you’re in a real court, you’ll need to do two things right off the bat. First, find your state’s Rules of Civil Procedure and look up the part about service of process and motions to dismiss. Some motions to dismiss have to be filed before you answer the petition. Find out if you have one of those – the petition is vague, names the wrong person, or violates certain procedural requirements some states have for debt collectors. If you have one of these, you might be (and almost certainly are) waiving your right to bring the motion if you answer first.
If they claim you were served, but you have some reason to dispute that, you probably need to bring what’s called a “motion to quash” service before you answer (as mentioned above), since answering will be regarded as your consent to the court’s jurisdiction.
If none of those concerns apply to you, you will need to answer the suit. In some states, they have what’s called a “verified petition,” which means that someone swore to the truth of the allegations. If you have that sort of petition, you will need to swear to your answer, and this means getting a notary public to witness the document. But this is rare. In most instances, the petition is an ordinary one signed by the lawyer for the debt collector. If that’s what you’ve got, you will simply want to deny almost all of the paragraphs, one by one, in the petition. Don’t go to absurd lengths and deny your name or address, if those are correct, but you should generally deny all of the other substantive allegations. The legal effect of your denial is to say, “prove it.”
In some states you can file what’s called a “general denial,” which does in one sentence what I just suggested.
If you think you have a counterclaim against the person suing you, you will want to add that to your answer.
We discuss “affirmative defenses” elsewhere, but in general they are facts that, even if what the debt collector says in its petition is true, would mean you don’t owe them money. Most typical of these sorts of defenses are some sort of agreement to settle or address the claim, or the passage of too much time before they brought the suit, called the statute of limitations.
The essence of an affirmative defense is that you bear the burden of proof in showing that these factors exist, and you also must plead them in your answer.
Finally, let’s talk about demanding a jury. Our position is, generally, that debt defendants should ask for a jury. We discuss this in greater length in our article and video on juries, but if you think you want a jury (as we recommend), you need to find out how your court and state require that you demand one. In federal court and some states, it’s enough to say it as part of your answer. In some states, you have to make a separate request by separate pleading. Find out what you are required to do and do that.
If by chance you’re just finding out about this after already starting to defend your case, that doesn’t mean it’s necessarily too late. If you have a right to jury trial, the right is absolute when you raise it in the proper way and time, but even if you don’t do it when you should, the court should normally grant your request anyway absent some sort of misbehavior or the passage of too much time, and they are required to be “liberal” in their interpretation of what’s too late. That is, they are supposed to lean towards granting your request for a jury, so even if you’re late, you should go for it if you want one.
This article updated 3/25/25
Don’t be a “Verification Sucker” – When You’re Not in Kansas Anymore
When a debt collector sues you as the first thing you hear from it (they can do that), this does not give you a right to dispute and require verification. Your rights are through the legal process, and you must answer the petition or you will be defaulted. Sometimes debt collectors use people’s confusion over their rights and do things which suggest you could dispute the debt. This video discusses your rights.
You would be amazed how often people ask me whether they should “just send a verification letter” to the company or law firm when they get served with a debt lawsuit. Or as one person put it, “now that I’ve called the court to tell them I object, should I just send a verification letter? Or was that enough?”
No. It wasn’t enough – it wasn’t even anything at all.
Dispute and Verification
Click here for a copy of this article in pdf form: Don’t be Verification Sucker
Let’s take a quick step back here and review some facts and some rights.
When a debt collector first contacts you regarding a debt it is attempting to collect, it is required by law to provide you certain information. If the contact is not in writing, it must send you a notice in writing. If the contact is in writing, that contact must contain a notice. That notice must inform you of the debt collector’s identity, the nature and amount of the debt in question, and your right to dispute the debt and require verification. People often refer to this notice as the “verification letter,” although more properly it’s a notice of the right to dispute the debt. If you dispute, they must verify the debt before attempting to collect again, and you have thirty days to dispute the debt.
If they don’t want to attempt to collect again, they don’t need to dispute. It’s a law supposed to prevent continued attempts to collect on an unverified debt.
A Lawsuit is NOT a First Contact
If you’ve never heard from a debt collector, can they sue you for a past due debt? And if they do, must they give you notice of your right to dispute? Yes. And no. They can sue you without first bugging you for money. If they do sue you, the lawsuit is NOT a contact that triggers your right to dispute and verification. That’s what the Fair Debt Collection Practices Act (FDCPA) says, and the reason for that is simple: you’re in the court system and play by court rules once a lawsuit gets filed.
You Must Answer
And the court rules are that once you get served with a lawsuit you must file an Answer (or other “responsive filing” – a motion to dismiss, for example) or you will be in default. Put another way, if you don’t respond in court with an Answer denying liability or a motion to change or get rid of the lawsuit, you will lose. The lawsuit changes the rules, and you “aren’t in Kansas anymore.” [That’s what Dorothy says in the Wizard of Oz when all the weird things start happening.]
Don’t be a Verification Sucker
The debt lawyers know the rules very well, and one would like to think that it’s only an “excess of caution” that causes them sometimes to print the FDCPA language on their lawsuit. But given the fact that so many people have sent dispute letters instead of answers, and the fact that the debt collectors KNOW this, that might be naïve.
What I’m here to tell you is that whether or not such language is on your lawsuit, YOU MUST ANSWER THE SUIT or face a default judgment. Don’t be a sucker – file an Answer or other responsive document within the time allowed by the rules of civil procedure. You must defend yourself in court – you’re not in Kansas anymore, and the FDCPA no longer applies.
A Little Window, Maybe
Litigation does not technically rule out the FDCPA entirely, just the “first contact” rule. It may be that the debt collector’s attachment of the notice to a lawsuit is itself a violation of the FDCPA, as it may be an attempt to sucker you into seeking verification instead of answering the lawsuit. It might be an unfair attempt to get a default judgment. I have argued as much before. That might give you a counterclaim to their lawsuit.
And if you have sought verification rather than answering, and they got a default judgment, you should certainly consider moving to vacate that judgment either on the basis of that deception or your own confusion. The courts favor judgments on the merits rather than technicalities, so there’s a very good chance such a motion to vacate, if filed in time, would work.
But these are not exceptions to the rule that you must respond to the lawsuit in court. If you get sued, the FDCPA no longer applies in that way. You must respond or they will get a default judgment against you, and the next you will hear about it will be when they garnish your wages or bank accounts. Don’t let that happen.
Disputing and demanding verification would be much easier, no doubt, but it doesn’t work at this point.
Don’t look for the “easy” way. Look for the RIGHT way.
Barbarians at the Gates
Are “Strategic Defaulters” Barbarians at the Gates of Rome?
Are people who are “strategically” defaulting on their home mortgages akin to barbarians looting Rome? Does the fact that more people are defaulting result in a weakening of the rule of law in our society? Justice Litle writes convincingly that the rise of strategic defaults means our country is on the road to ruin. But I would argue that it is not the strategic defaulters who are greasing our descent into hell. They’re just minor bit players in an overall drama.
This Happened because of Accounting Regulations
The changes to the accounting regulations governing how banks and other financial institutions report the value of their speculative holdings have done the real damage to our economy. Strategic defaults are merely an inevitable consequence of that change. Specifically, before March of 2009, banks were required to mark their investments to market. “Marking to market” means that a company holding assets must periodically reassign values to its assets for book-keeping purposes.
An example of that would be a stock market account. Every night-and actually at all times during the day-you can look at your stock market account and get an up to the minute idea of the value of the stocks you hold. That is easy for stocks, which are priced by the market on a continual basis, but much harder for more complicated assets. Marking to the market means that the company must attempt to determine the current market value of its assets at certain intervals. And in the case of the banks, the values of these assets can determine whether the bank is insolvent or running afoul of reserve requirements.
When mortgage backed securities (mbses) became “troubled” banks and investment firms were being forced to show large losses of capital, losses which in fact revealed that years of wild speculation had left the banks in a precarious position. Rather than allow the market to sort things out and deep-six some of the largest banks in existence, several bail-outs were instituted.
The most important of the bail-outs was perhaps least publicized: the dropping of the mark to market requirement. Under the new FASB regulations, banks are permitted to assign “historical” values to their investments. If they paid a dollar for mbses, they could carry the mbses as assets worth a dollar even though they had become worthless. This equally applies to home mortgages themselves. Many people call this “mark to make-believe.” Notice that the banks balance sheets then lost any relationship to reality, and any investor relying on the supposed strength of the underlying business was defrauded.
With a stroke of that pen, the banks became “solvent” again, the banking crisis was over, and the 2009 “bull market” began. Well. It sounded good, anyway. But the changes actually were an early abandonment of the “transparency” Obama claimed to want to restore to government and a wholesale adoption of fraudulent accounting within the very heart of our economy. The “bull market” that followed, and all the claims of “economic recovery,” have rested on the deception permitted by that regulatory change. And the rosy condition of the largest banks is a deception. Despite the regulatory changes, banks have been shut down at historic rates this year, and many of them are holding mbses which they have valued for their book-keeping purposes as 100% or more in excess of their actual value.
Banks with their Hands Tied
Of critical importance to the strategic home mortgage defaulters, however, is the fact that the banks are maintaining mortgages at their “historic” rather than (much smaller) actual value. Foreclosing is a historical event that would force a revaluation of the assets under the regulations.
That means the banks cannot foreclose on mortgages without revealing their actual financial condition, and since their actual condition is insolvency, their hands are tied. Accordingly, the banks have adopted a policy of “extend and pretend.” They are extending the loans and pretending they were not in default. But this has left observant, savvy people free to stop paying their mortgages but still remain in their houses, and naturally more of them are doing so as they see others doing it.
Overcoming Default Judgments
As anybody familiar with my work knows, most debt cases end in either default or “give-up settlements,” where the person sued agrees to everything (or almost everything) the debt collector wants. It is one of the strangest things in all of law: most debt cases that are filed couldn’t be won if they were opposed; but very few people fight. So 90 percent of the unwinnable cases filed in debt are in fact won with the greatest of ease.
Strange.
Pardon the sound quality on this recording, please. It’s old but still helpful.
So what is a default? It is first a court order, and often a judgment immediately or after a short delay, giving the plaintiff – the person who brought the suit – whatever they wanted. It happens when the defendant does not show up or defend himself or herself in court. Note that “default” is not the correct way to describe what happens if you DO show up and lose. The result of not showing up is usually a complete, automatic victory for the plaintiff, and that’s what we’re talking about.
The courts do not “favor” such an outcome. That’s because a case that is won because it wasn’t opposed is not a victory “on the merits” – there’s no real indication it’s fair, and as everybody knows in the debt context, it often is NOT fair. But what can the courts do?
If you have had a default against you, you may have a chance to get that changed. If you take steps, and if they think you weren’t playing games in the first place, they will often reverse the judgment. Then you go back to defending the lawsuit. If you get that far, you will probably win the suit – 90% of winning the case will be in getting the judgment vacated (removed). That will stop collection and start the case over – but if you’re willing to fight, and manage to get the default judgment vacated, you’ll find the rest of it pretty easy.
We have products that can help you vacate the default. And of course if you manage to do that, we can help with the rest of it, too.
Four Sneaky Tricks of Debt Collectors
Debt collectors make their money by scaring or tricking, people into forfeiting their rights to defend themselves. Often they will let you think you have come to some sort of agreement with them to avoid court (and judgment), they won’t work with you to accommodate your schedule, and in general try to trick, intimidate and scare you into staying away from court. Then they get default judgments. Here are some of their more common tricks. Check out the Litigation Manual and materials for things you can do if debt collectors try these on you.
Don’t let them trick you out of your right to defend yourself. If you fight, you have an excellent chance to win – if you don’t show up and they get a default judgment you may find your wages or bank accounts garnished before you know it.
How to Calculate Student Loans
Are you considering getting a student loan? Do you have one already and happen to be considering your alternatives? You will be well-advised to use a loan calculator. This will allow you to determine the size of the payment you can live with – and we highly recommend you try not to underestimate how much misery loan payments can bring you.
How to Use the Calculator
We somewhat arbitrarily took $200 as the maximum monthly payment that would be tolerable. This number is based upon our own experience and what we’ve observed. Note that the payment schedule is for ten years. Considering what we’ve said about leverage, if you have a good job, it can make sense to make your payments over this long, or even longer, a period. But we hated every minute of ours, and the world is unpredictable, so the longer period exposes you more to the risk of losing your job or other changes. You could sign up for a longer period and make extra payments, and that is what we did.
In any event, in the example above, we chose $200 as the monthly payment, a 9% interest rate, and a ten year period (120 payments) and clicked on “calculate.” The calculator returned the “Loan Amount = $15,788.34” And so we know that we could not get a loan larger than that, on those terms without exceeding the $200 per month payment.
What if we could get a better interest rate, though? Suppose we got an interest rate of 5%? That seems almost free compared to the rates for credit cards! How big a loan could we get without going over our $200 payment ceiling?
As you can see, that yielded a loan total of $18,856.27. As we point out in our Student Loan Report, that’s about a fourth of the cost of one year at Harvard or Yale. So what if you ignored our warnings about length of payment schedule and went with a repayment period of 20 years (this would likely be half of your entire work life, so we almost hate even to mention it). How much could you borrow then?
We made the change by changing number of payments from “120” to “240.” In other words, you can borrow $30,305.06 if you agree to repay for twenty years. That’s still less than half a year’s cost of the Ivy League Schools, and under a year’s out-of-state tuition for most state universities. So let’s flex one last time, and consider doubling our acceptable payment amounts to $400 per month for twenty years. That’s way too much, in our opinion, but here are the calculations:
With a simple rate of interest, doubling the payments allows you to borrow twice as much. And so, for the price of $400 per month for twenty years, you can almost afford a year at an Ivy League school.
We deliberately presented the information this way so that you would feel every cent and every minute. It is our belief that there are almost no circumstances where agreeing to anything like this makes sense. To see the real-life calculations facing the plaintiff (bankrupt person) in the Hixson case we refer to in our article on repaying student loans, please read A Case Study: The Choices Facing Hixson. In Hixson, the student got out of school with approximately $100,000 in debt and no job in his subject. It’s a pretty sad tale, but every person contemplating a student loan should consider it.
We have no connection to this calculator, but it will allow you to put in payment terms (number and interest rate) and determine how much money you could borrow; or it can help you take the loan principle and figure out how much you will have to pay – over a length of time you can set – to pay it off. In other words, this program lets you get a realistic handle on the amount of blood, sweat and tears your educational loan will cost. We hope it makes you take a hard look at the universities and their tuition rates.
Four Sneaky Tricks to Get You to Default
Four Sneaky Tricks by Debt Collectors to Get You to Default
Debt collectors make their money by scaring, or tricking, people into forfeiting their rights to defend themselves. Often they will let you think you have come to some sort of agreement with them to avoid court (and judgment), they won’t work with you to accommodate your schedule, and general try to intimidate and scare you into staying away from court. Here are some of their more common tricks. Check out the Debt Defense System and materials for things you can do if debt collectors try these on you.
Four Dirty Tricks and What to Do about Them
Debt collectors use many dirty tricks to try to scam, threaten, trick, or intimidate you into paying. This video goes into a few of those, and what you can do about them.
In this video, we discuss four tricks and point you to the sections of the Fair Debt Collections Practices Act that makes them illegal.
It is illegal for the debt collector to threaten to take legal actions that it cannot legally do. This would include threats of imprisonment, public humiliation, or garnishment or seizure of your wages.
It is also illegal for them to communicate untrue information or, where you have disputed the debt, to report the debt without mentioning that you did dispute.
Sometimes debt collectors will pretend to be various types of authority figures – and sometimes they will send a collection letter that looks either like a lawsuit or a judgment or other information from a court. Any form of deception about who is sending the letter to you, whether that deception takes the form of an actual lie or simply deceptive looking information, would also violate the Fair Debt Collection Practices Act.
If you think the debt collector has violated the law, or if you need to defend yourself from a lawsuit, be sure to check out our Debt Defense System – it will give you what you need to understand what you are facing and the help you need to defend yourself effectively from the debt collectors.
Check out our Guide to Legal Research and Analysis
If You Are Already Being Sued
If you are already being sued, you probably should not sign up for the course and wait for anything. You need action now. You should be doing things to protect yourself NOW. You can beat them – it’s mostly a question of knowing what you need to do and doing that thing throughout the lawsuit, while at the same time not doing the things you should not do, until you either make them go away or win at trial. It sounds simple, and it is – if you know what you’re doing. You can no those things with the Debt Defense System and get help doing the right things while avoiding the worng ones.
I have had a great deal of experience both as a litigator and web master and have realized that almost every person representing himself or herself in a debt case would do much better if (1) they have an opportunity, preferably on a regular basis, to talk to other people who can help them with insights and information; and (2) a lot of the work done for them. The Debt Defense System does that. When you buy the Debt Defense System, you will also get a membership which both allows you to use the full resources of Your Legal Leg Up’s website and participate in our weekly teleconferences where members speak to each other and Your Legal Leg Up’s staff.
Just think about how it will be, first when you walk away from the debt collectors who have been making your life miserable, and then as you move towards a life of greater freedom and happiness – free from debt, and free to build your future.
The Debt Defense System is a service designed to give you all the materials and support you will need to defend yourself from either the debt collectors or original creditors without having to hire a lawyer.
If You Are Not Already Being Sued
If you are not already being sued, and want to try to negotiate with the debt collectors or creditors to clear up your credit report or make sure they do not sue you, then you will want our Debt Negotiation System.
Not all negotiation and settlement happens in court, you know. It is possible to contact many creditors and debt collectors to work things out without a law suit. But – whether there is a lawsuit or not, all negotiations occur “within the shadow of the law.” That is, in order to negotiate effectively, you need to know what their rights are, and what your rights are, in the law. What can they do to you if you do not settle? And what can you do to them? Knowing the answers to these questions helps you handle the fear and uncertainty that haunts so many people as they try to get a grip on their financial lives. You can find the answers you need.
And after you find the answers that lie behind the debts, you still need to know what to say and how to say it. You’ll find plenty of help with that, too. You see, it makes a large difference who you’re talking to and where in the debt collection process you are. We do not offer empty formulas, but rather solid understanding of what they are after, what you might want or get… and a few suggestions about how to say things so you’ll get them.
Overcoming Default Judgments in Debt Cases
This is a companion to the video, “Procedure for Moving to Vacate Default Judgments.” This video explains why you should try to vacate (remove) a default judgment against you and generally how to go about doing it. The second video goes into a little more detail on that and tells you specifically what documents you will need to file and what they should contain. If you have defaulted on a debt suit and want to try to reopen it (to prevent collection), check out our product: Motion to Vacate Pack. For a more comprehensive understanding of the debt law and defense, you need our Debt Defense System.
We categorize this video under “collection” because often the way people discover there’s been a default judgment is that there is some action to garnish wages or collect on the judgment. If that’s your situation, it isn’t too late. To prevent the collection/garnishment, you will need to get the judgment against you vacated (eliminated). And the very first step in doing that is finding out what happened. To do that, you will go to the court, look up the judgment, get the file on it, and look in the file to see what happened.
It gets a little more complicated than that after you find out what happened, but there are actions you can take, and our job is to help you figure out which and to do them.
Entry of Appearance
The way you let the court and other side know, formally, that you are going to defend yourself, is by filing an “Entry of Appearance.” This video discusses this requirement and some other “red tape” like how days are counted.
The Entry of Appearance is important because once you do that, the court and other side must provide you notice of anything that is happening. Before that, you are subject to default without notice. You CAN enter a case without answering it, but you’re still subject to default. So enter your appearance AND answer the petition at the same time – even if you aren’t required by the court to do so.
In the lower courts in Missouri, people often show up for court and announce their presence when called. But if they don’t file an answer, if they miss another hearing they still get defaulted. Don’t let this happen to you.
Click here for a sample Entry of Appearance.