One in three Americans has a debt that’s been sent to a collection agency. If you’re one of the millions in collections, you could be sued. When a lawsuit is initiated, you should receive a summons along with a copy of the petition or complaint. However, it’s possible to get served without realizing it. The law enforcement official or process server might have handed the summons to someone in your home and then mailed the petition or complaint, or you might have moved, and the creditor cannot find you. That means the wheels of justice could be moving closer toward a lawsuit without you realizing it.

If you think a person or company is considering legal action against you and you’re worried that you might have been served without realizing it, you need to find out if a lawsuit has been filed. If it has, there are steps you can take to protect your rights.

Check with the Court Clerk

Visit the Court Clerk in your county of residence to find out if anyone has filed a lawsuit against you. The Court Clerk can conduct a record search to see if you have a pending lawsuit or judgment.

Hopefully, if a case has been filed, you’ll find out before the court issues a default judgment. However, if you failed to respond before the deadline and you do have a default judgment against you, the Court Clerk can provide you with relevant information. You can find out the name of the plaintiff, the amount you owe, and any interest that’s been added to your bill. The clerk can also explain how the debt will be collected. For instance, if the judge ordered a wage garnishment or a lien against your property, the Court Clerk will let you know.

The next steps you take depend on if the lawsuit is still pending or if a judgment has been issued.

What to Do if a Lawsuit Is Pending

If a lawsuit has been filed and a default judgment has not been issued, you have to act quickly. Arizona and Florida both have a 20-day deadline to respond to lawsuits, while the deadline in Texas is 14-20 days, depending on where the lawsuit is filed.

If you still have some time, consider attempting to negotiate a settlement if the debt is valid. If time is limited, file your answer with the court and send a copy to the plaintiff. Then, you can work on your legal defense or negotiate a settlement.

Your defense could include:

• Improper Service of Summons
• Identify Theft
• Statute of Limitations
• Lack of Standing
• The Debt Was Already Paid
• The Debt Amount Is Incorrect
• Missing Paperwork or Incomplete Chain of Custody

These are just some examples of possible defenses in a debt lawsuit. An attorney can help you select the best legal strategy for your case.

What If You Received a Default Judgment

If the Court Clerk tells you that you have a judgment against you and you were never served, you will need to file a motion to set aside the default judgment. You can base this motion on substantial defect because you weren’t properly served. You can even use this defense if the papers were served to someone at your home and you never received them. An attorney can help you file this motion.

What if the Judgment Stands?

If you discover you have a judgment against you and the judge doesn’t throw it out, you will need to have a strategy to move forward.

It’s best to negotiate a settlement before a judgment is issued, but that’s not possible in this instance. However, you still might be able to settle the debt for less, even if you have a default judgment against you.
This is most likely to happen if the creditor is worried that you’ll file for bankruptcy. If that happens, the creditor won’t receive anything, so the company might be open to negotiations.

While you likely won’t get as good of a deal as you would if you settled before the judgment, you still might be able to pay much less. The creditor might even accept a payment plan that doesn’t include wage garnishment.

Your second option is filing for bankruptcy. This is a common recourse for people who are dealing with debt. In 2019, there were 750,878 nonbusiness bankruptcy filings in the United States, many for consumer debt. If you have a judgment against you, you can still file for bankruptcy and have that debt removed. Also, if the creditor has already started garnishing your wages, that will stop once your bankruptcy is approved.

While most debts are eligible for bankruptcy, there are some exceptions. If you committed fraud when acquiring the debt, you cannot discharge it in bankruptcy. Also, if you never showed a good faith effort to make payments, the court might not approve the bankruptcy.

If you are eligible for bankruptcy, you should consider the benefits and drawbacks before filing. It’s wise to talk to a bankruptcy attorney before making this decision. Your attorney will consider your assets and income to determine if you are eligible for Chapter 7 or Chapter 13. Then, the attorney can explain the benefits and risks specific to your situation.

Don’t Face Creditors Alone

If a lawsuit has been filed against you, you don’t have to face it alone. A debt relief attorney can help you decide the best course of action. Your attorney might vacate the judgment if you weren’t properly sued and can even negotiate a settlement on your behalf. The attorney might even be able to get the case dismissed without payment if you have a strong defense. Talk to an attorney if you have a pending lawsuit or have received a default judgment. It might seem like building a defense is impossible, but you do have options. After you speak to an attorney, you will have a much better understanding of where you stand regarding the lawsuit.