Debt Lawsuit in Texas

If you’re facing a debt lawsuit in Texas you are not alone. Every day people across the state are served with notification that a creditor is suing them for an unpaid debt.

If you’ve been hit with a debt collection lawsuit in Texas, how much do you need to worry and how should you handle the situation?

Do Not Ignore the Lawsuit

First and foremost, you need to take the lawsuit seriously. If you’ve let payment of a debt lapse or you were unable to pay because of an emergency, and now the debt is far enough behind that the creditor is taking legal action against you, it’s important you take your situation seriously.

Do not assume that because you don’t have the money to pay that nothing will happen. Creditors that take you to court can be granted access to your bank accounts and other assets, and what might seem as if it’s no big deal can turn quickly into a nightmare if you fail to respond.

This is true even if a debt is not legitimately yours. There are instances – more than you might think – when something ends up on your credit report by mistake. You might be indirectly linked to a debt or there might have been a mistake along the way that connected you to a debt you have nothing to do with.

Unfortunately, even if a debt is not yours, you still need to address any legal action taken against you regarding that debt. If you’re able to show it’s not your debt, the court will ultimately determine you aren’t responsible for it, but you must take action. Not doing so could result in a default judgement in favor of the creditor or debt collector, and what wasn’t your debt could not be your responsibility because of that judgement. Additionally, you can be held responsible for attorney and court fees, adding to a debt that was never legally yours to begin with.

If you are notified of a debt lawsuit, the worst thing you can do is ignore the problem.

Respond to the Lawsuit

The first thing action you’ll want to take is responding to the debt lawsuit. You have the option of paying the debt in full, but if you can’t, you’ll need to respond to the lawsuit.

Responding to the lawsuit means more than just calling or writing a letter to the creditor. You need to file an official answer with the court and it must be done within a certain window of time – usually 20 or 30 days. In your answer, it’s best to not admit outright liability for the debt. Even if the debt is yours, you want to make sure the collector or creditor must work to prove it is yours.

In order for the court to find in the debt collector’s favor, they have the burden of proving the debt is yours.  The burden of proof is more than 50% that it is your debt.

Challenging a Debt Collection Lawsuit

Sometimes the best way to deal with a debt collection lawsuit in Texas is to challenge it. Even if the debt was originally yours, it can still be challenged and settled for a significant discount or thrown out all together.

It might also be possible to use the statute of limitations as your defense. Texas has a very consumer-friendly statute that’s only four years. If the debt collector is not able to collect on a debt within a four year period of the last activity on the debt, the statute has expired and the court will find in your favor.

Filing for Bankruptcy

A final option, if you’re being legally pursued by a debt you cannot afford to pay is to file for bankruptcy. If your only other option is to have your bank accounts garnished or to put other valuable assets at risk, this might be the best case scenario.

Bankruptcy can help you eliminate a number of your debts, including the unsecured credit card debt that is so often the subject of debt lawsuits in Texas. Filing for bankruptcy stops all collection efforts against you and allows you to assess your entire financial situation and come up with a solution that works for you.

To learn more or to speak to someone about what you should do if you are facing a debt lawsuit contact 1.800.220.4318.