One of the most significant steps a creditor can take to collect a debt is to file a civil lawsuit against the debtor. If the creditor is successful in obtaining a judgment, the debtor's wages and bank accounts may be subject to garnishment. If you've been served with a summons by a creditor in the state of Colorado, you need to know what steps to take to deal with the situation.
Answering the Summons
The first and most important thing you must do if you receive a summons from a creditor is to read the complaint carefully. The summons contains all the information relevant to the case, including the creditor's name and address, the amount owed, why they believe you owe the money and the trial date. The summons also contains a section where you must provide your answer to the lawsuit. This is basically an explanation of why you believe you don't owe the debt. You must return the summons with your answer on or before the trial date in order to avoid having a default judgment entered against you.
Prepare Your Case
If you believe you are not liable for the debt in question, you must prepare a defense for court. For example, Colorado state law prohibits debt collectors from filing a civil lawsuit if the debt is more than six years old. If you believe the debt you're being sued for is past the statute of limitations, you will need to provide documentation to the court to support your claim. This could include a copy of your credit report showing the last activity on the account, receipt of your last payment or your last account statement.
Contact the Creditor
If you acknowledge that you owe the debt, you can attempt to avoid court by contacting the creditor directly to try and establish a payment plan or offer a settlement. If you have cash on hand to negotiate with, the creditor may be willing to take less than what is owed and avoid the expense of going to court. If not, you may be able to convince them to allow you to pay over time. Maintain written records of all communications between yourself and the creditor.
Responding to a Default Judgment
If you fail to appear in court on the scheduled date, a default judgment is automatically entered against you. If this happens, you still have the opportunity to file a request with the court to set aside the judgment if you believe you have grounds to do so. You must complete the appropriate forms explaining why you believe the judgment should be set aside. For example, you may request a judgment be set aside if you were never properly notified of the original lawsuit. Once you file your request, the court will schedule a new trial date, when you will have an opportunity to present your evidence.
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