Chapter 2

You probably know the way the debt collection business works, but here’s a quick review.

How Debt Lawsuits begin

In the first place, somebody generates some sort of debt. Let’s say in this case that it was you, and that this is not one of the cases of mistaken identity or identity theft, although those things certainly happen often enough.[1]  Let’s suppose you used the credit card in this case, and when the bills came, you didn’t pay. They bugged you for a while, and then there was silence. You had time enough to hope they had forgotten or given up on you, and then a company you may never have even heard of began calling and writing. The company claims to be an “assignee” of the credit card company – they bought the debt, i.e., the right to bug you and collect money from you. Eventually, since you don’t pay, they file suit.

You Never Hear about the Suit

In our first example, you never hear of the lawsuit. How could that happen? Simple. The company filed the suit and then just never got you served you with the summons.  It happens. Sometimes it happens purely because of internal affairs with the debt collector and its lawyers: they change lawyers, for example, and allow too much time to pass before moving on with the suit. When a plaintiff files suit, it only gets a certain amount of time before the case is dismissed for lack of prosecution. Sometimes it’s that they couldn’t find you and serve the suit on you, and the case is dismissed. In that situation, the case is dismissed without prejudice (meaning they can sue you again if they want to), and nothing else happens.

The dismissal without prejudice itself is neutral, although it often means that the debt collector will actually leave you alone, so it’s good in that sense. Because filing suit is a matter of public record, you could eventually find out you got sued by checking court records (and if the debt collector violated the FDCPA by filing suit – if it was past the statute of limitations, for example), the violation occurred and is not “cured” (made right or legal) by their failure to pursue the case. But everything is fine for you in this example.

You Find out about the Suit After Judgment

In a second scenario, let’s say the debt collector gets the summons to a process server who actually does not serve you, but says he did. This happens so often it has a name: “sewer service.” When a process server claims to have served you, he must typically file an affidavit swearing that you were served, and in the case of personal, hand delivery service this affidavit often includes a description of you. None of this stops some process servers from lying about serving the summons, and because most debt defendants don’t challenge the service when and if they ever find out about the case, the process servers usually get away with it.

In this case, the debt collector shows up on the date set for hearing and, of course, you are not there. The debt collector then “calls for default” (asks the judge to award it a judgment), and the judge usually does so automatically. At some point, the debt collector then decides to try to collect on the judgment by garnishing you, and that really can’t be done without your noticing it – after your paycheck has been reduced or your bank account raided. A tremendous amount of damage can be done before you ever know about the judgment, in other words, but you will eventually find out. At this stage you will want to file a motion to vacate the default judgment.

You Hear about the Suit in Time

You can “hear about” a lawsuit in one of two ways: either “through the grapevine” one way or another, or by being served. However you happen to hear about the suit against you, your first action should be to get your state’s Rules of Civil Procedure and Evidence, and to look and find out if the court in which you are being sued has Local Rules. If it does, you should get them. You’re going to be playing a “game,” and you have to know the rules! If you don’t, you’re playing a “Sucker’s Game.”

Through the Grapevine

People do hear about being sued “through the grapevine” quite often and in lots of ways – mostly it happens because you know there’s a debt collection company after you, and you check the court records, but it can also happen that a neighbor notices the process server trying to serve you with the summons and mentions it, or other ways. Sometimes you’ll get a note asking you to come to some place to pick up the summons. However it happens, you could find out that you’re being sued without being served. What should you do in that situation?

I suggest you do nothing and wait to see if the process server can find and serve you. You have no obligation to go anywhere to pick up a summons in any jurisdiction I’m aware of (although if you get a note, you should research the question for your state before you pick up the summons – a good place to start such research would be by googling your state and “service of summons” and requirements).

You don’t have to wait, though. You could go to court, get a copy of the petition and file an answer or motion to dismiss. As a lawyer I would sometimes do this because I had a counterclaim and was confident that I could force the debt collector to dismiss the case with prejudice and agree to delete all credit references, and there was no reason to want to delay accomplishing those things. There could be other reasons, too. If the issue comes up for you, you’ll have to consider all the factors: defenses you have, convenience of timing, whether you have a counterclaim, etc., and then make the decision you consider best.

You Hear of Suit through Being Served the Summons

If you get served, you have to respond or you will be defaulted, which means that the debt collector will get a judgment for everything it asked for in its petition. You don’t want that, so you must respond with either a Motion to Dismiss or an Answer. We will discuss those options below.

What if you were served, did not respond in time, and were defaulted. Now you want to respond. How do you do that? By filing a Motion to Vacate.


[1] Even if the debt is not and never was yours, you must still deal with it if you are being sued. Once you are served and jurisdiction attaches, the court can and will issue a judgment against you unless you successfully defend yourself. Some people have come to me and are outraged that they should have to defend themselves for a debt that was “clearly” not theirs. If that is you, your remedy is in the Fair Debt Collection Practices Act, which makes attempting to collect a debt wrongfully illegal. But the court will never figure that out by itself. You must act!