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If You Don’t Respond to a Collections Lawsuit, You May Be Found Guilty

  • Oct 10 2019

Consumers in the US continue to face the highest levels of household debt ever; this means that along with over 45 million borrowers struggling to pay student loans back, many are also beginning to show more delinquencies and defaults in areas such as auto loans, and the ongoing typical challenges with unsecured debts like credit cards.

Recent news shows that household debt is currently showing ‘vulnerable spots’ in what seems to be a thriving economy on many levels.

“We are not in the ‘red’ zone of danger yet, but these measures are trending in the wrong direction, so it’s something to keep an eye on,” said Josh Wright, chief economist at Internet Collaborative Information Management Systems iCIMS. “There’s a risk there to the U.S. consumer engine.”

As the student loan crisis continues to escalate, with no signs of slowing down—and no signs of lenders discontinuing to offer what are sometimes massive amounts of funding to young borrowers—far too many are left in quandary about what to do. This is especially true for young borrowers under the thumb of private student loan servicers who in most cases do not offer much flexibility when there is inability to pay. This is the story with most unsecured debts too, as creditors may be sympathetic for a short period of time, but it doesn’t take long for them to resume aggressive collections efforts with only one focus: seeing their debt satisfied.

Ongoing delinquencies lead to collections lawsuits, and if a summons and complaint has arrived at your door, you must take such action very seriously. Unless you are ‘judgment-proof,’ and have absolutely nothing left to lose, it is critical to respond to the lawsuit with the help of an experienced collections lawsuit attorney from Fitzgerald & Campbell, APLC. Without a reply you are left completely vulnerable, declining to defend the financial allegations outlined by the creditor or debt collections agency in the summons and complaint. Finding you guilt by default, the court will most likely automatically grant a default judgment—also known as a court judgment—against you.

The default judgment can put you in a seriously weakened position financially and cause many headaches. If you have a job, your wages can be garnished—and up to 25 percent of your disposable income in California. If you have a checking account, your funds can be frozen. If you have a property, it may be seized and sold at public auction. With the help of your attorney, you may still be able to turn that around though, even at the last minute in filing a motion to vacate.

No matter how far these issues have progressed, an attorney from Fitzgerald & Campbell, APLC can help you get back on track, whether it means negotiating with creditors and helping you settle a debt with a lump-sum payment or a new set of monthly payments, responding to a lawsuit and defending you in court, or filing a motion to dismiss a judgment and freeing you from legal action altogether.

Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include collection lawsuits, default judgments, and more. Let us review your case and discuss what would work best for you. We are here to help! Click here to schedule a free 30-minute consultation, or call us at (855) 709-5788, or email us at info@debtorprotectors.com.

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Posted in: Collections lawsuit