I got a letter saying I’m being sued, now what?
You just got a letter stating you’re being sued for an unpaid debt. Maybe it’s for a credit card bill you couldn’t pay. Or a medical co-pay you overlooked. It could even be for your mortgage or student loans.
It can be a confusing or scary experience. But chances are, you probably have some idea what the bill is for. And since you’ve overlooked it this long, you’re probably tempted to toss it in the trash. That, however, is a big mistake!
In Minnesota, the “you’re sued” letter is called a summons and complain. It must be served by a process server. And responding to the summons is critical step in protecting yourself. If you don’t respond, the creditor suing you could obtain what’s called a default judgment. That means they automatically win their lawsuit because you never responded to their claim. Basically, “being sued” means a creditor (person or business) is alleging you owe them money and they will take legal steps to recover it. In Minnesota, that means obtaining a judgment against you.
If you do respond to the summons, it may go to court for a judge determine if you owe the debt and what fair payment arrangements would be. Chances are if you do respond, creditors will be willing to work with you to offer solutions you can manage. After all, creditors’ attorneys make their money collecting fees from suing people like you. Going to court costs them hundreds or thousands of dollars in litigation fees.
There are three important things to know when being sued.
1. Contact the law firm suing you on the creditor’s behalf, and ask them to “validate” or “prove” you in fact owe the alleged debt. You have a right to obtain copies of contracts, service consent forms, itemized statements–anything that demonstrates you legally entered a contract with them and the balance is legit. Whether you recall the debt vaguely or not at all, it’s up to the creditor to prove that you do.
If the creditor can’t do so, they lose.
2. “Go ahead and sue me, I don’t have anything!”
That’s the attitude of many. Creditors can take any number of measures to collect the unpaid balance. They may:
- Garnish your wages. Here, your employer is required to withhold up to 25% of your pay.
- Levy your bank account. In this instance, funds in your account are seized. They may take as much as is in your account, up to the balance owed.
- Place a lien on your car, property, or other valuable assets.
- Repossess any item that was offered as collateral to secure a loan.
Certain funds, such as social security, may be exempt. You would need to consult an attorney for a complete listing.
Exemptions aside, if they do obtain a judgment against you it will be permanent public record showing up: in your credit report, public court records—even via Google searches.
3. Answer the Summons and Complaint
If you don’t respond to the summons and complaint you were served, the creditor may win what’s called a default judgment. Basically, it’s a win because you essentially failed to argue it or respond to it. Like forfeiting a game, the other team—the creditor—wins.
You need to respond to all allegations in the letter, in writing, and within a couple of weeks. You can either draft a letter yourself, or talk to an attorney for legal assistance. The creditor will not tell you how to answer the letter. In fact, they’re hoping you don’t. That way, they automatically win.
In a nutshell, “being sued” may not be as scary as it seems. Make sure you understand the allegations against you. Demand proof of the debt. And most importantly, respond to the allegations against you in a timely manner.