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If a creditor is suing you over a debt, I might be able to help you with the pending lawsuit. You may or may not have actually been served with the lawsuit yet, but once you are served, you only have a limited amount of time to decide how you want to handle the lawsuit in order to keep them for receiving a judgment against you. I would like to meet with you, FOR FREE, to discuss the lawsuit and your options. Together, we can find the best way to help you overcome this financial hurdle.
LET ME HELP YOU WITH THIS LAWSUIT
If you have a pending lawsuit, but have not yet been served, you can normally expect a Sheriff’s Constable or private process server to come to your home or place of business and physically “serve you” with papers. It sometimes takes weeks after a lawsuit is filed before you are served. Once you are served, you have a limited amount of time to respond before a judgment is entered against you. In County Court, you generally have until the Monday following 20 days to respond to the lawsuit. In a Justice of the Peace Court or Small Claims Court, it is normally the Monday following 10 days.
If you fail to take action during this time period, the creditor can ask the judge to grant a default judgment against you for the amount they state in the lawsuit in addition to their attorneys fees and court costs. With this judgment, they will then attempt to collect against you by either by calling you constantly, sending you demand letters or even garnishing your bank accounts. It is also possible that they can seize any non-exempt property that you have, including stocks, bonds, certificates of deposit. They cannot, however, have you arrested for an unpaid debt unless it was a bad check or something similar. Creditors often make threats about having you arrested, but it is generally just a scare tactic to force you to pay something you cannot afford to pay.
A judgment can ruin your credit for years to come. With proper recording, it can create a lien against your assets. The deficiency amount can also become imputed income for federal tax purposes forcing you to pay tax on this amount as if it were income. A judgment is generally valid for 10 years, but can be renewed to continue much longer.
SUMMARY OF YOUR OPTIONS
If you do nothing, the creditor will receive a judgment against you. You have four basic options with a debt collection lawsuit. I will briefly explain each of these options below, but invite you to call and make an appointment for a FREE CONSULTATION so we can discuss these options in much greater detail.
OPTION 1: BEING JUDGMENT PROOF. Some people do not have any non-exempt assets and do not believe that they ever will. These people generally don’t mind the constant phone calls and letters, because they don’t answer the phone and throw away the mail without ever opening it. They are thus called “Judgment Proof” because even if a judgment is placed against them, they have no assets to seize and don’t answer the phone. While this works for some people, it doesn’t work for most. As stated above, a judgment is good for 10 years and can be renewed for an even longer period. So, even if you don’t have a bank account now, you may have one in 5 years at which time it could be garnished.
OPTION 2: DEFENDING THE LAWSUIT. If you have a defense to the lawsuit, we can file an answer and go to trial. If this was not your debt or if the statute of limitations has passed (generally 4 years from the date of default), you file an answer, serve discovery on the plaintiff and either convince them to dismiss the lawsuit or go to trial to explain the situation to the judge. If you have evidence that can easily be presented to the Court, this may be the best option. It is, however, always a risk to go to trial. There is no guarantee how the judge will rule or what will happen. If you believe you have a solid defense, call me and we can set up a time to discuss the issue and find the proper way to protect you from this lawsuit.
OPTION 3: SETTLING THE LAWSUIT. If you know that you owe the money and have sufficient resources to either make a lump sum settlement or a payment plan settlement, we can file an answer to the lawsuit and make them an offer. Generally speaking, if you make a lump sum settlement, you can pay a lower amount than you can with a payment plan. Most creditors will accept a payment plan for an amount less than the amount owed, but some creditors will only accept a payment plan that pays the entire amount. It all depends on the creditor suing you.
OPTION 4: FILING EITHER A CHAPTER 7 OR CHAPTER 13 BANKRUPTCY. If you do not have a defense to the lawsuit or if you cannot afford to make a settlement, you should consider either filing a Chapter 7 or Chapter 13. Many people today believe that bankruptcy is no longer an option, or just possibly not the right option for them. It is simply not true. Others feel that filing bankruptcy is morally wrong, but it simply isn’t true either. Forgiveness of debts dates back to the time of Moses and is a federally guaranteed right. Sometimes it is the only way to stop the harassment and to keep your assets from seizure. Bankruptcy is still a viable option for most consumers. Just this past month, hundreds of people in the Greater Houston area filed bankruptcy. I invite you to come in and meet with me for a FREE CONSULTATION to see if it is right for you. As long as you have not previously filed bankruptcy, you should qualify to file and stop this lawsuit in its tracks. I find that people who file bankruptcy are generally forced into it by circumstances beyond their control. Creditors back them into a corner where the only way out is to file. I understand that it is not your fault.
If you qualify, Chapter 7 can help you discharge your unsecured debts with the exception of some special types of debts such as student loans and child support. Some IRS debts can be discharged while others cannot. There are several factors to consider. If you owe money to the IRS, please call me to schedule an appointment so we can determine whether your IRS debt is dischargeable. A Chapter 7 usually lasts from 4 to 5 months and then you receive a clean slate. The credit card debts, unsecured loans, medical bills, repossession deficiencies, etc. are gone forever. These creditors are prohibited from contacting you once you file your case. The phone calls will soon stop as well as the letters, garnishments, and most importantly, this lawsuit. There are requirements for filing Chapter 7 that we can discuss in detail when we meet. Basically though, if you have a large amount of non-exempt property, you would not want to file Chapter 7 because the Trustee (an administrator appointed by the Court) can seize non-exempt property and sell it for the benefit of your creditors. Also, there is an income requirement for filing Chapter 7. The more you earn, the less likely you will be able to file Chapter 7 and would need to file Chapter 13. Otherwise, Chapter 7 is a good option to discharge your unsecured debts in a relatively quick manner. Call me to schedule an appointment, and together, we can discuss the procedures for filing bankruptcy in greater detail.
If you qualify, Chapter 13 can also help you discharge your unsecured debts with the same exceptions as listed above. If you have too many non-exempt assets or if you earn too much money to file Chapter 7, Chapter 13 is your next best option. It is a 5 year payment plan where you pay your unsecured creditors a percentage of the amount owed to them. Again, generally speaking, the more assets you have or the higher the income you have, the more the unsecured creditors will receive. In a typical plan, unsecured creditors are paid from 3 to 10 cents on the dollar, but that amount could be much more if you have high income or large amounts of non-exempt property. If you are behind on your house payments or car payments, you can also file Chapter 13 to put those back payments into the 5 year plan to stop a foreclosure or repossession. I will be happy to sit down with you to determine approximately how much your monthly plan payment would be and how much those unsecured creditors would receive. Chapter 13 is a good option to stop this lawsuit and allow you a 5 year period to pay a percentage to the creditor. It will give you peace of mind to know that the lawsuit is stopped and you have a viable plan for resolving this debt.
I WANT TO HELP YOU STOP THE HARASSMENT & STRESS OF THIS LAWSUIT
Lawsuits are very stressful, causing some people to lose sleep night after night. If you lose the lawsuit and have a judgment rendered against you, they may have the right to seize your bank accounts as well as other non-exempt assets. Let me help you fix this problem. You may have several options, but it is very important to act immediately. Don’t let this creditor destroy your life and take away your possessions. Let me help you find the peace and rest you deserve. Call me for a FREE CONSULTATION so I can help you determine which option to pursue in order to resolve this matter. Evening appointments are available. My fees are affordable and I will work with you to create a payment plan that suits your budget. I promise that you will meet with me, a qualified attorney, not simply a legal assistant or clerk. I personally answer my phone and take your calls. I have helped hundreds of individuals just like you to defend these types of lawsuits and to discharge their unsecured debts.
If you’re looking for relief from debt or assistance with Chapter 7 bankruptcy, we are here to help. We offer a free confidential, no obligation consultation to discuss your personal situation. Please call 281-847-4345 for immediate assistance or send us a message.
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