WHAT IF I GET SUED FOR A DEBT IN GEORGIA?
WHO MAY SUE YOU? A lawsuit may be brought directly by the creditor you owe--a bank, a credit card, a hospital, or a retailer who extended you credit.They hire a Georgia collections law firm and sue you. Your lawsuit also may be from a company you have not preciously dealt with, which purchased the debt from a former creditor. This means they have the right to sue you as if the debt were with them, since the right to collect transfers when ownership of the debt transfers. This company may itself be a debt collecting firm, or it may be a holding company or other entity which then hires a Georgia collections law firm to sue you.
IS IT VERY OLD DEBT? Some companies actually sue on debt that is too old to collect if it is disputed effectively.These companies specialize in buying old debts, perhaps even debts that are beyond the statute of limitations (SOL) (too old to collect legally), and sue on them anyway. Since so many people never bother to hire an attorney to fight a lawsuit, or try to argue it themselves and botch the job, many of these otherwise--SOL barred cases become collectable judgments against the debtor, because it was not properly and successfully defended in court.
WHERE CAN THEY SUE YOU? You have the right to be sued in your county of residence.In Georgia, any case involving up to $15,000 can be heard in Magistrate Court; cases involving a larger sum must be heard in a State or Superior Court. (In some rural counties, the only choices are Magistrate Court or Superior Court.) Usually, most smaller debtor lawsuits are brought in Magistrate Court.
The suit may have been filed a day or two before any attempts to serve you, or maybe as long as a month or two earlier, depending on how work is backed up, how on the ball the local Sheriff's Department is, etc.. Sooner or later, the Sheriff's Department makes three attempts to serve you, either at home or at work or both. They may either serve you personally, or serve "a person of suitable age and discretion" who knows you, such as a secretary, a teenage relative, a spouse, etc. who they find at your home or workplace.
WHAT IF I REFUSE TO ACCEPT SERVICE? Contrary to what some believe, you cannot just refuse to accept service once they find you.If you refuse to accept service, the deputy can simply drop the papers at your feet and report that you were served. If the deputy makes three unsuccessful attempts to find you or "a person of suitable age and discretion," they give up, and inform the creditor, who may then hire a private process server, who may make many more attempts. If you have moved and they cannot locate you, they can even serve you "by publication" - by publishing notices in the legal newspaper for your last known county of residence.
HOW LONG DO I HAVE TO ANSWER? Once you are served, the clock begins to run. The papers you are served with will include a Summons, which says:"TO THE ABOVE NAMED DEFENDANT(S): You are hereby summoned and required to file with the Clerk of said Court and serve upon plaintiff's attorney, whose name and address is: XXXXXXXXXXXXXXX an answer to the complaint which is herewith served upon you, within 30 days after service of this summons upon you, exclusive of the day of service. IF YOU FAIL TO DO SO, JUDGMENT BY DEFAULT WILL BE TAKEN AGAINST YOU FOR THE RELIEF DEMANDED IN THE COMPLAINT."
This means that you have 30 days from the date you actually received the summons to produce a written response or you will automatically lose the case without a hearing, and have a judgment entered against you. If you or your attorney files an answer with the court within the 30 days, then the matter is put on the court calendar for a trial. This may put off matters for anywhere from a week or so to several months, depending on which court, how busy they are, etc. (usually the lower the court, the quicker the response.)
WHAT HAPPENS NEXT? Eventually the case proceeds to trial. (In Magistrate Court, the case is heard only by a judge-- no jury trials are allowed.)One of the biggest mistakes you can make is just ignoring a lawsuit. A default judgment, which is sure to result if you do nothing, will hurt your credit even more than getting sued in the first place. It enables the creditor to get a FiFa. (Writ of Fieri Facias) issued against you and any property you own, which means anything you own can be seized or have a lien against it. They can also garnish your bank account, up to the full amount of the judgment, and/or garnish up to 25% of your take-home pay.
Another huge mistake many people make is trying to fight a debt case by themselves. Even though Magistrate Court is meant to be easier for people without a lawyer, the cold, hard fact is, almost all people who try to fight creditors' attorneys in debt cases end up losing. The cost of hiring a competent debtor's attorney is usually money well spent in all but the smallest cases, especially if they find you have some good defenses available.
WHAT ELSE CAN THEY DO? In addition to garnishing your pay or bank accounts, or putting liens on your property, your creditor can do even more:If you lose your case, the other side is allowed to serve you with "Post Judgment Discovery" papers. These mean that you are required by law to list your bank accounts, stocks, bonds, employer, property, or anything else that will help them collect the debt. If they can show you did not comply fully or are hiding assets, the court can fine or imprison you for noncompliance.
HOW CAN A LAWSUIT BE STOPPED? You can hire an attorney, who may or may not be able to find grounds to stop the suit, depending on the facts.If you have one or more lawsuits filed against you, you may already be in debt more than you want to admit. Will you be able to pay your basic living expenses if the court orders that one-fourth of your take-home pay be garnished to pay creditors? Will this just mean that you will be getting further and further behind? The good news is that regardless of whether you have any good grounds to defend the suit, filing bankruptcy stops all lawsuits instantly.
WHAT HAPPENS TO A LAWSUIT IF I FILE BANKRUPTCY? Sometimes a person starting to get lawsuits is in worse financial condition than they want to admit.If you decide you are fighting a losing war and decide to file bankruptcy, all collection efforts must stop immediately.
-If the 30 days from time of service has not run, no default judgment may be entered.
-If the case is scheduled to go to trial, it must be cancelled.
-If default judgment has already been entered, its effects are nullified.
-If the other side has already won and is attempting to collect, they must stop at once.
-If they have started garnishing your wages, they must stop permanently.
It is best to stop a lawsuit before time to file an answer has run. This way, you will not have a default judgment listed on your credit reports, so you can build up your credit score following bankruptcy faster. Let us know if we can help you.
Feel free to call for a no-obligation consultation.