Credit Card Lawsuits, Part III: Should I Respond?

Briefly reviewing what I have discussed earlier regarding credit card lawsuits...

You have been served with a credit card lawsuit by the sheriff. From that day, you have 20 days to respond, and the court will automatically grant you 10 more days when those 20 days expire. Your response needs to be a formal answer to the complaint filed in the relevant court. The answer must exert a defense and be in the proper form.

All of this raises the next important question... should you actually respond?

Just because you can respond doesn't mean that you should go through the time and effort, or pay an attorney to do so.

If the debt is not your debt, or if it was procured without your knowledge through fraud, you most certainly should respond. A consumer protection attorney should have no problem getting the complaint dismissed. Failing to respond could lead to a judgment being entered against you despite your innocence. A judgment could destroy your credit.

If you have not made a payment on the underlying debt or used the credit in question in 4 or more years, you should consult and an experienced lawyer to see if you can raise a statue of limitation defense (NOTE: this is an affirmative defense, meaning you must respond to the complaint and raise the defense or you will lose!). You may also want to respond if you suspect the creditor no longer possesses the original documentation for the loan, or if it was not transferred properly. These provide effective defenses to the complaint filed against you, and give a good shot at succeeding in court. It will be worth your money to hire an attorney.

However, if none of these circumstances apply, and you suspect the underlying debt is valid, you may decide to NOT respond. Not responding to a legal action is normally not a very good idea. But, it may not be necessary if you are filing (or preparing to file) a bankruptcy.

The bankruptcy automatic stay will stop any credit card lawsuit in its tracks. Filing a bankruptcy prevents creditors from filing a suit against you, proceeding with a suit already filed, or executing on a suit that has already become a judgment. So, if responding to the complaint is not possible, or feasible, or likely to succeed, you should be considering filing bankruptcy to enjoy the protections it offers.

Finally, an experienced consumer protection or bankruptcy attorney may be able to help you negotiate a settlement to stop the lawsuit from proceeding. A settlement agreement will stop the creditor from proceeding with the lawsuit as long as you are paying on the debt. Both options of bankruptcy and debt settlement will be discussed in a later post.

Whether or not to respond to a credit card lawsuit hinges on a couple factors discussed above... whether you have a reasonable chance to succeed, and whether bankruptcy or a negotiated settlement are legitimate options. Contact us and speak to an experienced Pittsburgh bankruptcy lawyer to learn your options and defend your rights.

I'll next discuss what happens when you do not respond to a credit card lawsuit and a default judgment is entered against you.

Credit Card Lawsuits, Part II: What Constitutes a "Response"

In a previous post, I discussed how long you have to respond to a credit card lawsuit (quick review... 20 days to respond, with 10 additional days normally given by the Court). That leads to the next question: What actually constitutes a response?

A response means formally answering the charges filed in the initial complaint by the "Plaintiff" (the credit card or collection company). This requires you to file an answer in the court where the complaint was filed. Your answer could be quite simple, but if it has any hope of succeeding, it should follow a form acceptable to the court, it should include any filing fees, and it should exert some type of defense.

The most common defenses used in credit card lawsuits are statue of limitations defenses or challenging the sufficiency of the credit card company's complaint. You should consult an attorney for legal advice regarding the raising of defenses, and also to make sure your answer is filed properly.

Regardless of your defense chosen, any response to a credit card lawsuit will need to be filed formally. This means you can not simply call the court or write a letter denying the charges. You certainly should not try to contact the judge directly. Also, contacting the law firm suing you will not be considered a proper "response", even if you speak with an attorney and begin negotiating a settlement agreement. Only a formal answer filed in the appropriate court will constitute a "response".

If you think you are not liable for the debt you are being sued on, or if you have not used the credit or made a payment in over 4 years... contact us! It might be worth filing a formal response. Occasionally, credit card lawsuits are filed too late, or without all the required documentation. Credit card companies will file the lawsuit hoping you don't know your rights!

Otherwise, there may be a better solution to dealing with the lawsuit, such as a bankruptcy or a settlement agreement. I can help with both, and I'll discuss both options in a later post.

The next posts on the subject of credit card lawsuits will deal with the hearing date and what happens when you DON'T formally respond.

Credit Card Lawsuits, Part I: How Long Do I Have to Respond?

The sheriff has come to your door and served you with a credit card lawsuit. Your mailbox is beginning to overflow with letters from attorneys wanting to represent you. The lawsuit itself doesn't make a lot of sense. What do you do?

The first thing you'll probably want to know is whether you should respond, and secondly how you should respond. This raises the first big question: How long do I have to respond to a credit card lawsuit?

If the lawsuit was filed in the Allegheny Court of Common Pleas, there will be a hearing date on the cover sheet of the petition served on you. However, this is not the most important date for filing a response. The date on which the sheriff serves the lawsuit on you (or any adult in your home) will start the clock ticking on when you must respond.

The "Notice to Defend" in the paperwork served on you will read:

"If you wish to defend against the claims set forth in the following pages, you must take action within TWENTY (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you..."

Seems pretty straightforward? 20 days to file a response. This doesn't seem like a lot of time, and it is not. The good news is that you will have more than 20 days in Pittsburgh and Allegheny County. (this DOESN'T seem very straightforward!) When the 20 days after you have been served expires, the Court will automatically grant you another 10 days to file a response. The Court will mail you a notice of this 10 day extension, the sheriff will not come to your door again. The policy is to give defendants in credit card lawsuits every possible opportunity to defend themselves.

So, to answer the original question, you basically have 30 days from the date of original service to respond to a credit card lawsuit in Allegheny County. Once those 30 days expire, the lawsuit will become a "default judgment" (the subject of a future post). It is probably a good idea to use these 30 days wisely... contact an attorney. Consider these 30 days to be a grace period where you have an opportunity to take action to protect your interests.

The next logical question is what constitutes an actual "response". It will be the subject of our next blog post.