What's the worst thing a creditor can do to you? Sue you, because a successful suit gives the creditor a judgement, amnd a judgementgives the creditor the right to not only look for assets of yours, but to take those assets away when they find them. (If you have read my other threads, you have already made that a virtual impossibility.... hint, hint, hint) What's the worst thing you can do when a creditor sues you? The answer is - DO NOTHING. You just rolled over and played dead and allowed your creditor to figuratively walk all over you. This essay will give you some ideas on how to deal with a lawyer representing a creditor. The creditor's lawyer may be an in-house attorney or may be an outside attorney. if the creditor and the attorney are located in different cities or states, the attorney is probably an outside attorney. The difference between inside and outside attorneys is like night and day. The inside attorney is paid a salary. That, and the filing fees, are just about all the creditor's legal overhead. The outside attorney usually bills the creditor by the case if he gets a Default Judgement, or by the hour if no default judgement can be gotten. The outside attorney relies on the debtors lying down and playing dead, so a default judgement can be obtained. UNDERSTANDING THE LEGAL PROCESS <<<Note: I am not an attorney. This information has been gathered by my many years experience as a bill collector, collection manager and by discussions with collection attorneys, dealings with collection attorneys and by suing creditors myself. Actual form names and procedures may vary from state to state. I am using Arizona, which is fairly representative, as an example.>>>> A law suit starts when one party to the suit feels aggrieved enough to pay the Clerk of the Court a filing fee and obtain a Docket Number for a Summons and Complaint. The Summons part is notification to the defendant that there is a suit filed, and that an Answer must be filed within a certain time period. The Complaint gives the details of the reason for the suit. Failure to file the Answer gives teh plaintiff the right to seek a Judgement by Default, or Default Judgement. Filing a timely Answer preserves the Defendant's right to a Trial and eliminated the possibility of a Default Judgement. The economics of a suit are simple - lawyers don't work for free. The Creditor's Lawyer makes more money per hour going to Court with 100 cases - all of which failed to file an Answer - and getting 100 Default Judgements in teh 15 minutes it will take, than he will make working his tail off prosecuting ONE case. Lawyers LOVE Default Judgemens, and therefore Debtors HATE them. Don't EVER allow a Default Judgement to be Answered entered against you. When you file an Answer to a lawsuit, YOUR case has to be removed form the lawyer's pile of potential Default Judgements and has to be handled singly. This will result in your CREDITOR being assessed additional legal fees - fees which probably cannot be passed along to you, since most contracts contain a boilerplate "attorneys fees in event of default will be X% of the amount owed." HOW TO DRIVE YOURV CREDITORS' LEGAL FEES THROUGH THE ROOF 1. File an Answer. Go to teh Court House and ask to see some examples of Answers to Civil Complaints so you can see how they are done. Copy their format and suit them to your case. Even if every allegation made by the creditor is 100% correct and accurate, it isn't so till teh Judge says so. Deny everything. It's called a General Denial. 2. File a Counterclaim. Find ANY reason to sue the creditor in return. No matter how frivolous. Let the Judge decide the issues, don't surrender the victory to teyh creditor. I have interposed countercliams for (a) damage to my home caused by an oil company that spilled oil, (b) Loss of sleep and Loss of Consortium (that means sex with my wife because she was tired also) because teh creditor's personnel called me at inconvenient hours and (c) the goods sold to me on credit didn't fit, didn't look quite right, were off color, didn't l.ast as long as I thought they should.... ANYTHING at all..... The Answer and the Counterclaim are usually filed in the same document. DO IT. Next..... send your creditor on a paper chase. In order for a business to have the right to sue a natural person in Court, certain legal niceties must be observed. You will now give your Creditor a chance to prove they have all been met. You will do this through a process called pre-trial Discovery. Send to the attorney a document called First Set of Interrogatories. 1. The business must be organized in some State. Demand a Certified Copy of those documents. 2. Your creditor, if organized in another state, must be licensed to do business in youyr state. Demand a certified copy of those documents. 3. The right of a business to use the Courts is conditional on the business' tax filings being current. Demand a Certificate of Compliance from the Plaintoff's home state and YOUR state. 4. Demand a list of Officers. In most States, only Officers of a Corporation, or their attorneys, can sign Pleadings. The answers to your Interrogatories are a Pleading. 5. Demand a full accounting of all money into and out of your account since its inception. You should get the idea by now. make them prove (a) their existence, (b) right to sue (c) right to sue in YOUR state, (d) right to sue YOU, (e) damages, etc.... In other words, send them on a paper chase. The purpose of this paper chase is two-fold: To tie them up with internal labor costs and (b) to give you ammo for future and additional interrogatories. You can research your state's Civil Court rules of procedure through www.findlaw.com - it is a gold mine for pro-se litigants (people who go into Court without a lawyer). Next you will set up a ticker system whereby you will watch the calendar. The Rules of the Courts give a certain time under which the Interrogatories must be answered. If they are not, file with the Court a Motion to Compel. The Motion to Compel is asking the Judge to Order the plaintiff to answer the Interrogatories, Failure to do so would preclude (prevent) them from using that information against you. By filing enough Motions and enough Interrogatories, you should be able to drive your Creditor's legal bills so high they will be agreeable to a settlement. Asa strategy, a month before trial, I send a letter asking for a settlement Conference. taht letter is usually ignored and it looks very damning in Court, since Judges LOVE settlements and HATE parties who force trials. I realize this is general - since there are 52 different legal systems in this country (50 states, DC and Federal) I can't give a specific road map for any state. If you feel yourself getting lost, go to a Law School near you. It is possible you could get one of the students to guide you or one of the professors. use the Law School Librarian to make the introduction - it works better.
