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Creditor Lawsuits Creditor Lawsuits

If a Lawsuit Is Filed

If You Go To Trial

Despite your best efforts during the pre-trial phase, you might not be able to have the debt collection lawsuit dismissed and you might have to argue your case at trial. What should you do?

Of course the answer, again, depends on your particular situation. Make sure you discuss your particular case with an attorney or our Lawsuit Defense Partner and understand the pros and cons of proceeding to trial.

In general, here are a few major points to consider:

  1. Do you have any affirmative defenses? Affirmative defenses give you a much stronger case and increase the likelihood that you will be able to have the case dismissed.
  2. Did they fail to comply with any discovery requests? If so it might be because they don't have the information. If they can't prove that you owe the debt, that they are legally entitled to collect on the debt, and/or fully account for how they calculated what you owe, you have a good chance of having the lawsuit dismissed.
  3. Do you have money to settle? I told you at the beginning of this program to save as much money as you can for settlements and/or in case you are sued. Now might be a good time to consider settling. There are no guarantees that you will win, and if you lose, you will be responsible for additional court and attorney fees. You can always wait until after you lose to offer a settlement, but as a rule you will get a better deal if you settle prior to trail.
  4. What is the worst-case scenario? Obviously the worst-case scenario is that you lose. However, what would that mean to you in practical terms? There will be a negative hit to your credit report, but do you need good credit in the near-term? Do you own a home, and if so, does your state have a homestead exemption? Can your wages be garnished, or is your income exempt from garnishment? Do you have any other assets they can go after? What are the debt collection laws in your state and the statute of limitations on judgments? Check out the section on Asset Protection to help answer these questions.

In many cases the lawyer will call and offer a settlement before the trial. Most lawyers are given fairly wide latitude by their clients to settle; they usually have permission to settle for half or more of the outstanding balance. Give them a chance to make an offer. Then, whatever it is, counter-offer with no more than one-third of their offer. If you owe $20,000 and they offer $10,000, counter-offer with $3,000 or so. (You can't get it if you don't ask.) Make sure you thoroughly understand the section on Negotiated Settlements (found in the Roadmap section) and what needs to be contained in a settlement agreement before proceeding.

If you do decide to go to trial, my suggestion is that you get some first-hand experience. Go to court before your trial date, and just sit in the audience area and observe what happens. You'll quickly get a sense for what goes on during the average trial (it's not as scary or complicated as you might think). You might see an attorney who impresses you, or an individual who argues like crazy and gets the judge on their side. A key preparation step is learning how the system works and seeing how the key players behave.

Thoroughly review the documents you were provided during discovery. Has the creditor provided any materials? What did they provide? What is missing? What does and doesn't make sense? Review your case, documents, and strategy with our Lawsuit Defense Partner, and make sure you understand what and what not to do or say. Preparation is obviously key, so do your best to prepare for trial.

A final consideration is that you might want to hire an attorney rather than (or in addition to) enrolling in our Lawsuit Defense Partner Program. Some of you might feel too uncertain about the subject matter, or simply be uncomfortable arguing your case in open court. Others might have significant assets to protect and want to hire an attorney who specializes in this area. Any reputable debt attorney should give you a free consultation and recommend a course of action and fee schedule. Contact your local state bar association for a referral.

> A Final Note

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