Why Your Creditor Must (and Will) Sue You
When the harassing phone calls don’t result in payment of your debt, a debt collector or attorney will file a lawsuit against you and deliver it to your door with a Summons. If you have received a Summons, it means that a lawsuit has been filed against you and you have been “served” with the legal action. You have a short amount of time to respond to a summons and stop the legal action against you. Otherwise, a judgment will be entered against you and then collection will begin through a bank levy on your bank account or a wage garnishment of your wages that you receive from your job. To stop the lawsuit and Summons, you can hire an attorney to fight the case (and every other law suit that is filed against you down the road), or you can file a bankruptcy to eliminate the underlying debt.
Your creditors have only a certain amount of time to sue you or else the will forfeit the right to sue you due to the running of the Statute of Limitations. A Statute of Limitations sets a deadline for filing any type of legal action, including a collection action. Once a Statute of Limitations runs, you can no longer be sued and served with a Summons. It used to be that debt collection law firms would wait until just before the statute of limitations ended to file a lawsuit against you. In San Diego, credit card lenders are becoming more proactive and procrastinating less. It is becoming more common that shortly into the collection process and well before the statute of limitations expires, debt collectors and their attorneys in San Diego are suing customers on credit card debts. Also becoming more and more common in San Diego County is that HOAs are filing lawsuits to collect HOA dues after homeowners have walked away from their home or condo.
Filing Bankruptcy to Stop a Lawsuit
Filing bankruptcy will put an end to most types of lawsuits. As a general rule (there are exceptions), your filing will:
- Stop a lawsuit for unpaid credit cards.
- Stop a lawsuit for unpaid medical bills.
- Stop a lawsuit to collect a wiped out home equity loan after a foreclosure.
- Stop a lawsuit seeking to collect HOA fees.
- Stop a lawsuit to collect a car loan debt after a repossession.
Defending Lawsuits Can Be Expensive
Defending lawsuits can be very expensive. In San Diego, you can expect to pay an attorney $30,000 to $50,000 if the lawsuit goes to trial. In most cases, your money would be spent more wisely on hiring an attorney to file a bankruptcy for you. You can expect to spend far less on hiring a lawyer to file a bankruptcy than you would on paying a lawyer to defend a case. What is more, you don’t have to worry about winning or losing the lawsuit. Instead, you can simply eliminate the judgment and give you a fresh start, as opposed to defending the lawsuit and simply delaying the inevitable entry of judgment of some amount against you.
Flat Fee vs. Hourly
In contrast to defending an action, which can be very expensive (paying an attorney on an hourly basis), a bankruptcy filing is much less costly of a remedy. Most lawyers and law firms structure their rates on a flat fee basis, meaning that there is a fixed fee for completing the entire case. This is in contrast to hiring a lawyer on an hourly basis, which means paying a hefty initial deposit to cover hourly fees and then replenishing the deposit on a regular basis and paying tens of thousands of dollars to complete the case. With bankruptcy, the flat fee for completing the entire case is usually less then just the initial deposit toward fees for hiring a lawyer to simply file a response to the Summons and begin preparing a defense to the lawsuit. What’s worse, you may spend tens of thousands of dollars, only to lose (which is very likely with a collection action), only to have to pay the debt anyway. With bankruptcy, you are assured to wipe out the debt and you will avoid receiving a Summons from anyone else who may be thinking about suing you.
If you have been sued with a Summons for a lawsuit, you need to talk to a lawyer, and fast. Contact Bankruptcy Legal Center today to schedule your free consultation with a San Diego bankruptcy attorney and discuss your options for how to stop the law suit. We’ll help you prevent a judgment from being entered against you, so you can avoid a bank levy and wage garnishment. Call now and speak directly to an attorney who can stop your lawsuit before it becomes a judgment against you.