I Am Being Sued by a Creditor: What Should I Do Next?

Ryan R. McNeil,
JD McNeil Law Firm
Akron, OH

creditor suing

Falling behind on your bills and required monthly payments will make any normal person stressed out, anxious, and worried.

When you fail to make a required contractual payment, creditors and debt collectors will start to call you repeatedly and ask for payment. You may also receive threatening letters in the mail demanding payment and threatening collection actions. While the collection letters are worrisome, the most serious letter you will receive in the mail is a civil lawsuit or a summons filed in a court of law where you are a named defendant as the person being sued.

The most important thing to do when you receive notice of a lawsuit is to explore your options immediately with an experienced attorney.  The first thing the attorney will need to know is the date the plaintiff filed the lawsuit. In most states, the law allows a specific number of days where a defendant may file a response to the lawsuit. (In Ohio, its 28 days from service of the summons.) 

The earlier a defendant comes up with a strategy on how to deal with a lawsuit, the more options the defendant has at their disposal. It is crucial that the defendant not simply ignore the response deadline. A defendant waives legal options afforded to them if they allow the plaintiff to obtain a default judgment in the civil lawsuit.

Once the plaintiff obtains a judgment from the court, the plaintiff is authorized by the court to proceed with a wage garnishment, bank account seizure, or file a judgement lien against the defendant’s property.

If a client reaches out to an attorney early in the process, they can offer options. One option may be to file bankruptcy before the plaintiff is able to execute on the judgment. If the advice is that client should not (or does not need to) file a bankruptcy, the client will have the opportunity to hire counsel to defend the lawsuit or attempt to work out a settlement with the plaintiff.

On the other hand, if a defendant waits to contact an attorney months after the creditor filed the lawsuit, obtained a judgment, and served the judgment on the client’s employer for a wage garnishment, the options become much more limited. At that point, the defendant may only have a few weeks (or even days) to file a bankruptcy to stop a wage garnishment.

As you can imagine, once a creditor starts to garnish a paycheck, it can be mathematically impossible to come up with the required fees to hire an attorney to represent your interests.

It is a natural reaction to want to delay the need to make a tough decision. However, the notice of a formal lawsuit is a sign that your clock is ticking. When you are sued, it is officially time to decide what steps you are going to take to resolve your long-term financial situation.

A public education project of the National Association of Chapter Thirteen Trustees

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The materials on this website are for general information purposes only and should not be construed as legal advice, legal opinion, or any other advice on any specific facts or circumstances. You should not act or refrain from acting upon this information without seeking professional advice.