Understanding the process 

When a creditor sues you for outstanding debt, they’re asking a court to officially rule on the alleged money owed and grant them a binding legal judgment against you. Armed with a judge’s judgment in their corner, creditors gain substantially more leverage and abilities when it comes to actively collecting on those debts. 

This could include obtaining orders to garnish portions of your paycheck until the debt is fully repaid. Or allowing them to potentially seize funds from your bank accounts, put liens on any property or assets you own, or even withhold money from tax refunds, lottery winnings, and legal settlements you may receive down the line. 

In other words, with a legal court judgment officially certifying your debt obligation, creditors now have a path towards super-charging their collection abilities to forcibly take money directly from wherever your income flows. 

Don’t ignore it 

Given the high stakes of having a judgment rendered against you, the worst possible response to receiving that summons is ignoring or avoiding it altogether. Debt collectors certainly hope you’ll miss those critical deadlines to officially respond as they’ll then move forward with getting a judgment by default. 

As soon as you receive legal notices of a debt lawsuit, carefully read through all documents and note the deadline for taking action – typically around 30 days is standard for officially responding with your “answer” contesting the claims. Miss that date and the creditors win an automatic green light. 

Options for your response 

Just because you’ve been served debt lawsuit papers doesn’t necessarily mean all is lost and you have no choice but to concede defeat. You have a few potential routes for strategically answering and defending yourself, including: 

• Pay in full – If both the debt amount and the creditor’s documentation checks out, you can settle by simply paying the full balance legally owed. Not ideal, but the quickest path to resolving the matter head-on. 

• Dispute the claims – Should any details, like owing the specific amount claimed or creditor identification seem incorrect or mistaken, you can file an “answer” officially disputing those particulars through the courts. This may force the creditor to substantiate legitimacy through discovery and documentation. 

• Seek a settlement – Another option is directly negotiating with the creditor’s attorney for a reasonable settlement, often less than the full debt value. If both parties agree to settlement terms and get court approval, the lawsuit is dismissed.  

• Bankruptcy – If it’s looking like multiple creditors may succeed in winning judgments against you, bankruptcy presents an avenue for consolidating those debts and renegotiating all terms – or in some cases, discharging them entirely. But bankruptcy entails longer term repercussions. 

Need some relief?  

If your mounting debt is putting you at legal risk, you might want to consider debt relief. At JG Wentworth, we’ve helped countless individuals resolve their debt through our Debt Relief Program.* In fact, if you have $10,000 or more in unsecured debt, there’s a good chance you’ll qualify and get the JGW advantage: 

• One monthly program payment 

• We negotiate on your behalf 

• Average debt resolution in as little as 48-60 months 

• 24/7 support 

• We only get paid if we settle your debt 

If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side, helping you to avoid standing before a judge?