Are being sued for a debt from an unknown company? Then, chances are your debt was sold to a debt buyer. In fact, most people do not take the time to find out who is suing them. Or even respond to the lawsuit, because they do not think it is real.
So, is it a scam?
The best way to tell if a lawsuit is real, is if the lawsuit was served by a process server. If this is the case, there are real consequences at stake. In California, you must respond within thirty days of receiving the summons and complaint. However, the response time will vary based on the state in which you live.
The company is hoping you will ignore the summons and complaint. Many people ignore the summons and complaint thinking that the charged off debt is no longer collectible. Once a credit card has been unpaid for 120-160 days, many banks will charge off the debt and then sell the right to collect to debt buyers.
These debt buyers purchase old charged off debts from banks for pennies on the dollar to sue for the entire amount owed. The company needs to provide proof that they have proper ownership of the debt to collect the full amount.
What Steps Can You Take?
Once you have been served, you need to act quickly. If a debt buying company wins, you will end up with a judgment against you which can result in garnished wages. However, you have options to avoid the judgment against you: fight it in court, settle your debt, or file for bankruptcy.
Have been served with a lawsuit for a debt? Call our office to speak with a qualified consumer attorney.