I need some advice here. We are self employed and our business fell off a cliff. We were advised to file bankruptcy. As an alternative, we are attempting to shortsale our home (it is under contract) and settle other debts. It will take a few years. I was served a complaint on a credit card debt. I had 20 days to reply. There honestly was not sufficient info for me to substantiate this. I believe I owe the creditor money, but can't verify the amount. The amount claimed, $15,000, was more than I made last year. I used a form letter to deny the debt. The attorney suing has mailed me a Motion for Summary Judgement. Very long & complicated. Beyond my expertise to answer and I don't want to spend the money on an atty. The smart thing is to file bankruptcy. But I would rather try to settle over a few years. I am judgement proof here. Even if they win, there is nothing to collect. If the creditors push too hard, I will take the legal advice & file bankruptcy. How do I answer a Motion for Summary Judgement? Do you think it is OK to call the attorney suing me & tell them the truth, which is: -- I'm not sure of the amount that I owe. -- I cannot pay it. -- I have no assets that are not underwater and extremely limited income. -- If they, and other creditors, do get a judgement I will discharge the judgement in Chapter 7, no asset case. -- I am willing to pay a settlement of 20 cents on the dollar. If not OK to call the attonrey suing me, is therea form letter I can use to reply? First post and thank you all for advice.
Generally the one suing is supposed to substantiate why they are suing you. Is this the OC or a debt buyer? You should figure that out before you decide how to handle the situation. What you earn and what you owe have no necessary connection. You essentially answered the complaint, so the attorney is now seeking summary judgment, as opposed to a default judgment, what would've been the general way to go had you not responded. A summary judgment has the same effect as a default judgment except it takes longer, buying you a bit of time, might cost more in attorney's fees that they'll likely seek to include in the judgment, and says "summary judgment" instead of "default judgment" in the line saying what it is. Opposition to summary judgment is the other side's chance to make its case usually without in-person testimony. This costs less than bringing in live witnesses. Many unrepresented defendants just show up and never file their opposition to summary judgment (their legal argument), and their affidavits and other documents which provide facts used in their legal arguments to show that there is a material issue of fact for trial. You should figure out what your goals are. If you need additional time to negotiate with the other side, you might work to defeat their summary judgment. Or if you think that the other side might not really own the alleged debt, you might also seek to defeat them at this point. So why is it smart to file bankruptcy? If you go to a BK attorney, that might be all they do. A broader view might be more helpful. If you could find an attorney who defends consumers, and pay him some reasonable amount of money, you might get more options. You haven't provided many details here but it seems like you might be in for a long haul. If you have many creditors seeking payment, you may have to take a judgment or two strategically while you wait out the SOL in your state. This will be easier if it is 3 years than if it is 6 years. In that situation, finding a way to lose well, that is to lose the fight but not lose on vital aspects, especially the interest rate on the judgment, becomes a goal. Of course exactly what you should do depends on your specific situation and your specific court laws, etc. This is why you need a lawyer who can actually give you legal advice.
Hi Bob - thank you for taking the time to answer me. It is much appreciated. We do have a long haul. The easiest thing is bankruptcy. But we don't want to file. We would rather take a couple of years & settle debts where we can. We are in the middle of short saling our home & I need to take as much cash as possible to get through closing. Then I will start to try and settle debts. But it is a massive amount and I can't do it all at once. My general plan is to offer 20 cents on the dollar and at that rate, it will still take us a couple of years to settle up. I don't want to lose this case because I cannot pay the full freight & it will push us into bankruptcy. I did consult an attorney but they want a very large retainer. These are bankruptcy attorneys and perhaps I need a different attorney. The atty suing me represents the original CC company. I know that I owe them a significant amount. They have not substantiated the amount in the suit. I would like to either (1) buy more time so I can deal with this in a few months, not now or (2) reach agreement to settle this. My gut feel is to call the attorney up & just tell the truth. It is in their best interest to settle with me. I have nothing to attach, and I'm self emplyed earning very little. I hope to earn more in the future, though and use that to settle debts. But if someone wins a large judgement, I will be forced into bankruptcy. Anyway, any insight you share is again, much appreciated.
One more thing: I have read that it can be effective to demand arbitration. This immediately removes the suing attorney from the equation. This might work better for my goal of settling. But this is just something that I read. Any commments?
