QUESTION
What is my first step if I am being sued by a finance company for a contract loan?
Asked on Apr 26th, 2013 on Bankruptcy - New York
More details to this question:
I am being sued by a finance company for x amount. I got served yesterday and says I have 30 days to respond. Would it help if I contact the company directly and work something out?
7 ANSWERS
When you are served with a lawsuit you have 3 options: 1) Contact the lender and either pay the debt in full or negotiate a settlement. You should do this right away, for if you work something out with the lender within 30 days from the day you were served, and you don't file an Answer with the Court by then, the lender will get a default judgment against you. After they get the judgment that opens them up to remedies like garnishment of your wages and bank accounts. 2) File an Answer with the Court. If you don't believe you are liable for the debt, you can fight it in Court. If the amount owed is under $25,000, the Court will put your case in the mandatory arbitration program and an arbitrator will decide your case. If you are liable for the debt, filing an Answer will buy you more time to determine what you want to do about the debt. 3) File Bankruptcy before the lender obtains a default judgment. A bankruptcy filing will immediately stop the lawsuit in its tracks and, if you successfully complete the bankruptcy, you will relieved of the debt forever. I highly recommend that you consult an attorney to discuss these options.
Answered on Apr 28th, 2013 at 9:48 PM
William A. Siebert
You can and should try to work something out, but answer the complaint first.
Answered on Apr 28th, 2013 at 9:38 PM
Your first step depends on your situation and what kind of assets/debts you have and your circumstances. Think of the summons and complaint as an invitation to participate in the legal process; but its not a requirement that you do anything. You can do the following: (1) Do nothing. if you are judgment proof and live in NC, this may be an option. In such case, I would save money and hope to save up enough to settle the debt at some point.(2) File bankruptcy. you should have at least $10,000 in dischargeable debt, including this loan. For a chapter 13 bankruptcy, you have to have a steady income stream and you would only do this if you have more assets/income than the law allows. Chapter 7 bankruptcies are for those who have assets/income below what is allowed. To see which bankruptcy you qualify for, I suggest that you talk to a bankruptcy attorney in your area. The exemptions and income thresholds vary from state to state so its important to speak to a lawyer who practices in your area. If your only option is to file a chapter 13 bankruptcy if you filed bankruptcy, then there are other things you can do to deal with the debt.
Answered on Apr 28th, 2013 at 8:32 PM
Family Attorney serving Henderson, NV
at
Harris, Yug & Ohlinger
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That is usually the best course of action, especially if you know you owe the debt.
Answered on Apr 26th, 2013 at 1:44 PM
Yes call them and make a deal.
Answered on Apr 26th, 2013 at 1:44 PM
Debt Collection Attorney serving Chicago, IL
Partner at
Edelman, Combs, Latturner & Goodwin, LLC
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You should consult a consumer lawyer and see whether there are any defenses and what it would cost to defend. Make sure that you comply with all court dates and do not default.
Answered on Apr 26th, 2013 at 1:44 PM
You can. But if you cannot resolve it soon then you must file an answer within 30 days.
Answered on Apr 26th, 2013 at 1:44 PM