Roadmap Roadmap

The 5 Mile Markers

Mile Marker 4: You Are Served with a Lawsuit

As you know, lawsuits are fairly rare where unsecured debt is concerned, but they can and do happen. What should you do? Just like with dunning letters, your first step is to respond!

Step One: Respond to Lawsuits

The Lawsuit section offers advice and guidance for dealing with a summons and responding to a lawsuit.

Action Steps:
  1. Enroll in our Lawsuit Defense Partner Program or hire an attorney.
  2. Answer the complaint within the specified time frame—never give up your rights!
  3. Provide the information requested, but do not volunteer any additional information and never admit to anything the creditor should have to prove.
  4. Request discovery and use other affirmative defenses.
  5. Move to dismiss if the creditor fails to respond in a timely or appropriate manner.

Just like with a dunning letter, don't stick your head in the sand. You must respond to the lawsuit or a default judgment will be entered against you.

Step Two: Consider Settling the Lawsuit

If you are sued and despite your best efforts you can't have the case dismissed, consider settling using the money you started saving at Mile Marker 2.

A judgment is a hit to your credit score, and just before trial you are in a fairly good negotiating position (the creditor doesn't want to go to trial any more than you do). As always, this decision is up to you. Make sure you understand the pros and cons of settlement before you decide.

Action Steps:
  1. Consult with our Lawsuit Defense Partner, or an attorney in your area.
  2. Review the relevant sections in the Lawsuit section and the Settlement section.
  3. Get everything in writing first and make sure your credit report is updated to "paid as agreed" or the entry is removed altogether.
> Mile Marker 5: You Are NOT Served with a Lawsuit