Preparing for Your Debt Collection Lawsuit Court Date

 You have received a summons and complaint and you filed your answer.  What should you do next?

Step One:  Confirm the Date and Time of Your Appearance
After you file your answer, the court will mail you a notice with the date and time of your first court appearance.  If you don't receive this notice within a few weeks after you file your answer, you should call the clerk's office and ask whether your court date has been set.  You’ll need to provide your name and case number. DO NOT miss your first court date, because the court will enter a default judgment against you If that happens, you will have the difficult job of trying to convince the judge to set aside the default. You’ll have to file a motion to set aside and make extra court appearances and you will have made the whole process much more difficult.

Step Two:  Gather Your Evidence
If you want to submit evidence in support of your defenses, now is the time to gather and organize it.  For example:
• If you were served at the wrong address, you should get proof of your address at the time of service.  The best kind of proof is a copy of your lease or a utility bill or a letter from a government agency, such as the Social Security Administration, HRA, or Medicaid.
• If you are an identity theft victim, you should get a police report.
• If you have paid the debt, you should gather proof of payment like cancelled checks or insurance letters and payoffs. If you have paid the debt once already you should contact me ASAP because that violates State and Federal law and the creditor / debt buyer should have to pay your legal expenses in defending a frivolous action.
• If the debt was discharged in bankruptcy, you should gather your bankruptcy records, especially the schedule F and creditor matrix, the list of debts to be discharged and your proof of discharge. NOTE: if your debt was properly listed in your bankruptcy papers then the creditor and or debt buyer may be guilty of violating the bankruptcy discharge injunction in your case. In which case you may be entitled to damages and at minimum your legal fees in defending such a frivolous collection action. TALK TO A CONSUMER / BANKRUPTCY LAWYER ASAP. You’ll have a much easier time of it with a consumer lawyer at your side.
• If you have exempt income, bring proof of the source of your income, such as an award letter from Social Security or Worker’s Compensation. You should also bring your last three bank statements showing these exempt income deposits was your only income. REMEMBER, IF YOU CO-MINGLE  exempt funds with non exempt funds the creditor will be able to argue that it is entitled to the non exempt funds. I advise my clients to file an sworn statement/affidavit with the court stating the only income they have is exempt from collection and attach their last three bank statements as proof. I have provided this affidavit of exempt funds in the free materials on my web site. Use it. If the creditor attempts to garnish your wages after being served with a copy of the affidavit and your bank statements CALL ME ASAP because that’s an illegal garnishment. You do this even if the creditor has already obtained a judgment against you and is now attempting garnishment of your exempt assets.

Don’t worry if you do not have evidence to submit.  In credit card cases, it is very common for the defendant not to have any evidence at all.   Remember that the plaintiff has the burden of proof.  That means it is the plaintiff's job to come forward with proof that you owe the debt, or the case must be dismissed. Also remember that your testimony under oath is also evidence which will win the day if the plaintiff can’t come up with its own evidence to rebut it. 

Step Three:  Make a Decision About Settlement
At your first court date, the plaintiff and the judge will ask you if you want to settle the case by making a payment agreement.  If you really owe the debt (and the plaintiff can prove it, AND THAT’S A MIGHTY BIG “IF”) , then you should prepare for this moment in advance by deciding whether you want to and can afford to settle the case.  If you do wish to settle, you should decide on an amount that is affordable to you.  Write your bottom line down (but don’t spill it at the beginning of the negotiations), and bring it with you to the court date.  There is also a Michigan State income / expense form to calculate what you have left over at the end of the month. I’ve put it on my website for your use in “free forms.” You can look the rest of my webite for some helpful guidelines to consider as you decide whether or not to make a settlement agreement.

Step Four:  Practice Your Part
Court can be confusing, and you will not have much time to tell your side of the story.  Therefore, it is important to pick out a few key points and stick to them.  Practice in front of the mirror. Below are some possible points that you might want to make in court, depending on your situation.  If you need help deciding what points to focus on, call my office 810-653-3300 and schedule an appointment.
If you have a solid defense:  By "solid defense," I mean a reason why you clearly should not have to pay.  Examples of solid defenses are: 1) you were served at the wrong address, 2) you are an identity theft victim, 3) it is not your debt, 4) the debt is past the statute of limitations, 5) the debt has been paid or discharged in bankruptcy, or you do not owe the debt for some other reason.  In this case, you should refuse to enter into a settlement agreement and you should assert your defense at every possible opportunity.  See Common Defenses to Creditor Lawsuits.
If you feel you owe some money, you can afford to make payments, and you want to negotiate a settlement agreement:  You must still assert defenses.  But you can use your defenses as a bargaining chip in order to negotiate a lower settlement amount.  Remember that if the plaintiff is a debt buyer, it bought your debt from your original creditor for pennies on the dollar, and it frequently lacks the evidence it needs to win the case.  The plaintiff can afford to reduce the amount of the debt significantly and still make a profit.  Offer a little less than you want to pay, and be firm.  Don't agree to pay more than is comfortable for you.  If the plaintiff won't agree to your terms, ask to see proof of the debt.
If you feel you owe some money, but you cannot afford to make payments:  You have no choice but to dispute the debt. You can honestly dispute the debt if you are not 100% sure either that you that owe it or how much you owe. Many times illegal fees and interest are added to these debts and you have a right to see how they calculated the amount they claim is owed. You must insist that the plaintiff come forward with evidence that it has the right to sue you and that you owe the amount it has demanded.  Most likely, the plaintiff will not have this proof, and the case will have to be adjourned for another day.  In the unlikely event that the plaintiff does have some evidence of the debt, ask for an adjournment so that you have time to examine the evidence against you.
 

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