What Should I do in a Debt Collection Lawsuit?

When debt builds up and debtors do not pay, creditors in most places have the right to file debt collection lawsuits. While the idea of going to court to defend yourself in a debt collection lawsuit may seem unpleasant or even frightening, it is essential to seek legal help and show up for your court date. If you are proactive in handling your case, you may receive a better-than-expected outcome. Additionally, your creditor may win a default judgment against you if you fail to show up in court.

One of the most important steps you can take in handling a debt collection lawsuit is getting legal help. A lawyer can not only explain what you should expect from the debt collection lawsuit process, but may also help you figure out whether you have a defense in the case. A lawyer can help you prepare for your day in court and may even show up as your legal representation. Likewise, a lawyer may negotiate with your creditors before court and once your court date arrives.

Before your court date arrives, you may do well to contact your creditor and attempt to negotiate a settlement. In many cases, creditors are willing to take less than the full amount of the debt. In some cases, creditors may also be willing to restructure your debts to make paying them off easier. It's important, however, to get any deals you make in writing.

While it may be normal to want to ignore a debt collection lawsuit summons, especially if you do not have the money to repay the debt, it is essential that you show up for your day in court. You may do well to take along any paperwork you have that concerns the case. For example, if you made payments and the creditor is maintaining that you didn't, canceled checks or bank statements can help you to prove otherwise. Likewise, if you tried, in writing, to make payment arrangements and your creditor refused, it makes sense to take this documentation to court as well. If your creditor has engaged in any illegal practices when attempting to collect your debt, documentation of these incidents could also prove useful.

Once you arrive in court, you'll typically follow the advice of your lawyer. If you are representing yourself, however, you'll typically have to explain your defense on your own. A judge will decide how much, if anything, you have to pay. Keep in mind that if you lose a debt collection lawsuit, the judgment may remain on your credit report for several years.