Sued for Debt and New to this Site?
If you’re being sued for debt, you’re probably asking yourself several questions: is it possible to defend? Do I have to have a lawyer and how much would it cost? and what happens if I lose? It can be confusing, and you may be getting confusing signs.
We’re going to answer those questions on this page and then direct you towards more resources on the site and at Your Legal Leg Up.
Is it Possible to Defend against a Debt Collector?
Yes it is.
It is possible to defend yourself either by hiring a lawyer or even doing it yourself. The cost question will be important to your choice on what to do, but understand that debt collectors buy debts in large quantities with very dubious records (the original creditors almost always refuse to guarantee the accuracy of their records). In addition to their records being of questionable quality, most debt collectors simply don’t get any real records at all. They know they’ll win about 90% of their cases either by default or by what I call “show up to give up,” which is where debt defendants do show up in court, but only to make arrangements with the debt collector to pay the debt in payments. Since so many people do not fight them in court, their business is designed to pick the “low-hanging fruit” – the people who give up. This gives you a great chance to win.
Even the original creditors do not routinely keep all the records they should in order to win, and with so many people who will give up, they also don’t have a lot of appetite for the fight.
This is not to say that you’ll win if you just show up and fight, but winning is possible if you do the right things.
What does it Cost to Hire a Lawyer?
I hear lots of different stories about what it will cost to hire a lawyer to defend you. Mostly, these days, it would start at about $2,500, but you might find less expensive, and you will certainly find more expensive options. If you hire a lawyer, you want to make sure they’ll fight for you and not simply try to broker a settlement – they won’t get enough better of a deal to justify the expense. You could make nearly the same deal as one of these lawyers. On the other hand, if the lawyer will fight, your chances of winning are better with a lawyer than doing it on your own.
There are two problems with this for most people. Either they don’t have $2,500 to spend on a lawyer, or they’re being sued for an amount that does not justify spending that much to defend the suit. Debt collectors know this, of course, and they count on it scaring you out of doing anything. And that works, as I pointed out above, about 90% of the time, but it doesn’t have to work against you.
You can do it on your own.
You Do Not Have to Have a Lawyer
Because of the way the debt collectors do business, and because debt law is not complicated compared to some other kinds of law, you can represent yourself. That’s called “self-representation” or “pro se representation.” (Pro se is pronounced “pro say”) You have an excellent chance of winning if you choose to do it that way. You have probably guessed, or already knew, that this company exists to help you do just that.
What does it Cost if you Lose?
If you simply give up and let the other side get a default judgment, they’ll start looking for any assets of yours they can find, and they’ll garnish them if they find any. You won’t know in advance that they have found them, though – it’s just your checks will start bouncing or you’ll suddenly get a smaller paycheck. This can be a disaster. And they could and often do hurt your credit by reporting the judgment, which makes it harder for you to get an apartment or car loan, and more expensive to buy insurance, among other things. So it’s a good idea to fight. And not to lose.
These things may be even worse if you make a settlement agreement you can’t keep.
Corporations Never Just “Give Up.”
I have been in litigation against a large number of companies in my time, and I can say that they never just give up. They always fight, no matter how much in the wrong they were because they know that by doing so they will drive DOWN the final settlement agreement. You can do the same thing. There’s a good chance they won’t have what they need to win at all, but sometimes they do, and the only way you’ll know is by fighting at least a little bit and finding out. I am not aware of a single time when doing that increased the final amount the other side won, when they did win, and in all the cases of which I’m aware, putting up a good fight has always reduced the amount the other side would accept to settle. That’s why corporations never give up.
It’s simple math: the collection companies want to make as much money as possible, and spending a lot to make you pay a little doesn’t make sense when they can spend a little to make a lot of people pay much more. It may be your life, but it’s just a business to them, and they’ll do what makes them the most money. This means that it’s (almost) always smart to start by defending, as corporations always do. Then you can figure out if they have what they need and make a better deal if you don’t decide to try to win. And if you can’t make a payment, what do you have to lose by fighting?
You should fight. And if you can’t afford a lawyer, you can do it yourself. For more information sign up for our Newsletter below.