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Stopping Creditor Lawsuits

Stopping Creditor Lawsuits

Lawsuits by creditors to collect money have become incredibly common. The lawsuit can be filed by either the original creditor, a collection company or a collection law firm the borrower has never heard of. Learn more about stopping creditor lawsuits.

Here is an example of the first scenario. Capital One sues John Doe becase John Doe had a Capital One credit card, defaulted on the payments, and now is trying to recover money that was loaned to John Doe. The borrower is likely to understand what is happening in these types of lawsuits, since the borrower has borrowed directly from that creditor.

Here is an example of the second scenario. Jane Doe owes money to Chase Bank. Chase Bank assigns that debt to another company called Unifund CCR Partners. Now Unifund CCR Partners sues to collect the debt that was originally owed to Chase Bank. When consumers face these lawsuits, they are often confused since they don’t recognize the name of the company suing them. These types of lawsuits are very common, since creditors typically can and do assign their right to collect on these debts to other collection companies.

Here are some examples of collection companies that I have come across frequently in my practice: Nemdegelt Inc., Asset Acceptance, Cach LLC, Cavalry Portfolio, Crown Asset, Northstar Capital, Palisades Acquisition, Erin Capital, Unifund CCR Partners, LVNV Funding, Arrow Financial, World Wide Asset Purchasing, Midland Funding, Resolution Financial, and Portfolio Recovery. I suspect there are many more.

In the courts of the State of Georgia, you have 30 days from date of service of the summons to answer this lawsuit. The answer must be filed with court, and must be legally sufficient. Once a timely and legally sufficient answer is filed, the lawsuit will go on. I am often asked, “ Can I settle the debt after I have been sued?” The answer is yes, but you must be careful not to default and file a legally sufficient answer with the court in a timely fashion. This will not help in stopping creditor lawsuits. If you don’t do so, then you will be in much worst position to negotiate since the creditor can obtain a judgment against you and can garnish you or lien your property. If this happens, you have less bargaining power. I suggest obtaining a lawyer to help you deal with these lawsuits. Often you are dealing with very seasoned collection law firms and it is very easy to misstep.

Bankruptcy is another option to consider. The Automatic stay provision of the bankruptcy code automatically stops these types of lawsuits. The creditor cannot go forward with the lawsuit, since the bankruptcy code basically forces the lawsuit to stop.

Debt consolidation companies and Creditor lawsuits

Once the creditor files a lawsuit against a borrower, the borrower must deal with that lawsuit by either fighting it in state court or seeking bankruptcy protection. Debt consolidation companies do neither. So, I don’t think a debt consolidation company can help you in these types of situations. To the contrary, I have seen that debt consolidation companies create the conditions for these lawsuits. I do not suggest contacting these companies to help with stopping creditor lawsuits.