Credit Card and Medical Debt Lawsuits

Nothing drops the spirits of a person like opening the front door to see a sheriff standing there serving a summons and lawsuit. It’s the familiar and dreaded start of a lawsuit often symbolized by a yellow piece of paper on top. This summons often lists a credit card company or medical debt collection company as plaintiff and as defendant, you and/or your spouse. You can also be served by certified mail, but either way, as soon as you receive the lawsuit you have exactly 30 days to respond in North Carolina otherwise the plaintiff will win by default. In fact, it seems the vast majority of lawsuits of this nature go unanswered which means the allegations contained therein are deemed admitted. Since the allegations of the Plaintiff are deemed admitted, the plaintiff can move forward and ask the court for a judgment against the Defendant. Once a judgment is granted, the plaintiff will have the opportunity to attempt to execute against the property, including your bank accounts, your vehicle, or even your house. Not to mention that a judgment in North Carolina lasts for ten (if not twenty) years and therefore, just because you do not have any major property today, does not mean you will not have property in the future that the creditor could levy.

That scenario is a scary one, but an all too familiar one. Credit card companies and medical debt collectors file these lawsuits by the dozens. Whether it is a sign of the aggressive nature of collection companies or the fledgling economy, many individuals debt woes end up with a lawsuit. The important course for any individual that receives a lawsuit of this nature is to contact an experienced attorney to understand your rights and your risks. Not everybody is the same and accordingly, the course that you take may be different than a neighbor or a family friend or coworker that received the same type of lawsuit.

The first step is often to ask the court for an additional 30 days to respond. This will often be granted and will forward you the time to evaluate your options or hire an attorney. While everyone would be well advised to consult with an attorney, the defenses to a lawsuit are unfortunately limited. Most people recognize that if they are receiving a lawsuit for debt, that they actually owe the money. While an experienced attorney may be able to buy time and raise technical flaws in the lawsuit, it is often an insurmountable task to defeat the credit card companies or the medical debt collectors’ simple and singular allegation: you owe them money. This is an important consideration for an individual facing a lawsuit of this nature, because the money that individual may have to spend for legal fees could go to other uses such as a settlement of the debt or even filing bankruptcy. Unlike other types of civil litigation, credit card medical debt lawsuits are straightforward. They generally feature an ironclad document contract that you signed that clearly makes nonpayment a term of default. Once you miss a payment then you are in default; that is a hard argument to contradict.

The decision as to whether to fight the lawsuit, negotiated settlement, file bankruptcy, is the decision to make with your attorney. The simple fact of the matter is that an attorney is valuable and will likely charge for his or her services regardless of the course that you decide to take. Therefore, the attorney is free to give you the best advice for your situation, not the attorneys’ best financial situation (not to mention that it is unethical for the attorney to do otherwise). So a client facing a tough decision about what to do with a credit card or medical debt lawsuit can feel confident that they are getting the best advice possible. The experience attorneys at Arnold and Smith, PLLC can evaluate your situation and help you make the best decision possible. If you like to speak to an experienced attorney is not hesitate to contact us.