When you’re served with a lawsuit for a credit card or other consumer debt, you’re like a deer frozen in the headlights. Maybe you don’t realize you’re being sued. Perhaps you don’t think there’s anything you can do to stop the wheels of justice from turning. Think again.
The New York City court system sees thousands of credit card issuers and debt buyers file a lawsuit against a consumer for an unpaid debt every month. Stand at the clerk’s window and you’ll see people walk in with stacks of complaints that are inches high, and each one represents money in the bank for the credit card industry.
I’ve seen statistics saying that 80% of the credit card lawsuits filed in New York end up in a default judgment, with consumers being held responsible for tens of thousands of dollars each time. Income executions, bank account restraints, and an ever-deepening cycle of financial difficulty results.
In my firm, we see people every day with default judgments. Personally, I think that 80% figure is a low-end estimate.
If only people followed these simple steps to avoiding default.
Open Your Mail (No Matter How Scary It Is)
We’re raised to think the only way we can be served with a lawsuit is by personal service. Though that’s the preferred method, New York law allows the plaintiff (that’s the entity suing you) to serve you by mail if they can’t get it in your hand. A copy needs to be posted on your door, but if you live in an apartment building there’s no telling how long that’s going to last before someone rips it down.
To be safe, open the mail. If you’re being sued, you’ll get a copy in an envelope.
Read The Mail
Letters look like … well, like letters. Lawsuits have a different look to them. In fact, in New York a consumer credit lawsuit needs to have an indication at the top telling you that you’re being sued.
If in doubt, take the complaint to a lawyer or the county clerk to have someone explain it to you.
Act Immediately
You get only a short amount of time to respond to a lawsuit before it goes to default, so don’t waste a minute. Get down to the court to file an answer or speak with a lawyer to map out a defense. Every minute is precious.
Agree To Nothing
A lawsuit is nothing more than someone claiming something against you. In the case of a credit card collection suit, it’s just someone claiming you owe them money. In order for them to get a judgment, they need to prove every single element of the case. If someone wants your hard-earned money, make them work for it.
Remember That Words Mean Nothing
A phone call to the credit card collector or their lawyer will not protect your rights. Sending a letter begging for help doesn’t mean a thing. The only way to protect yourself is to file an answer to the lawsuit.
Call A Lawyer
In my office, we defend credit card collection lawsuits fairly regularly. For some people, that’s the right move. For others, bankruptcy or other settlement strategies work better. Either way, you’re going to want to sit down with someone like me who can navigate the collection lawsuit waters.
Image credit: Life As Art
Jay S. Fleischman, the Managing Attorney of our Southern California office, speaks regularly at national events on the subjects of credit, debt, bankruptcy, and consumer protection. 
David B. Shaev, the Managing Attorney of our New York office, has been a bankruptcy lawyer for over 35 years. 
