When a creditor cannot collect a debt, they have a couple of options:
- They can bundle up the bad debt on their ledgers and sell it off to another collector.
- They can write off the debt as a loss and move on. Or
- They can file a lawsuit with the local court and ask for a Judgment.
The first two items are straightforward so in this article I’ll be talking about the lawsuit and how it proceeds.
When a creditor has made attempts to collect a debt but has been unsuccessful, they may file a complaint with the local court. The complaint is a filing where they allege that you owe them money and the reason why you owe the money. It is important to note that the date on the complaint does not determine how much time you have to respond/answer.
Once the complaint is filed, they have 60 days to “serve” you with a copy of it along with a summons. If they do not serve you (or someone else on your behalf) with the documents within 60 days, the court can dismiss the case for lack of prosecution (i.e. they didn’t move the case along quickly enough).
If they do serve you, the summons will tell you how much time you have to file an “answer” to the complaint (in most cases it is 14 to 30 days). The clock starts ticking on your deadline to respond once you are served. If you get a knock on the door and a process server hands you a summons and complaint on Monday, then Tuesday is day 1 of your 30 days (and yes, weekends count).
At that point your options are:
- File an “Answer” and deny owing the money and request a trial (you will need to serve a copy of your Answer on the other side and pay a response fee to the court). The court will set the matter for trial and you will get your chance to prove you do not owe the money to the judge.
- Call the creditor and see if they will work with you to resolve the matter directly (see the “How to deal directly with the Creditor” button below).
- Do nothing. If you do not respond to the lawsuit and the time to respond expires, the creditor will ask the court to enter a Judgment.
