Court cases on television portray high drama and interesting situations, but this is rarely the way that it really is when a creditor sues a debtor for nonpayment of a debt. The process is very mechanical, and emotionless. Knowing this in advance can help a debtor deal with the matter objectively, and keep the emotional response to a minimum. Taking proactive steps can help stave off a judgment or garnishment before it happens.
Respond
When you receive an official court summons, it will have the date of the hearing and the location of the court. The summons will also have the person you must respond to as well as the date that the response is due. You should respond to the summons in writing to preserve your legal rights. If you do not respond, the court could issue a judgment against you by default. Call the court to verify that you are being sued because collection agencies sometimes send letters that look like official court documents to scare consumers.
Hearing Attendance
If the debt is not yours, or is not valid, you need to attend the court hearing to contest the debt. If you miss the hearing, you will probably lose the case by default, and have a judgment entered for a debt that is not yours. If you legitimately owe the debt, you may want to go to the hearing, but you will probably lose the lawsuit anyway. Staying away in this case would probably not affect the outcome of the case.
Negotiate
When a debtor first receives a summons to court, there is still time to negotiate a settlement with the creditor. In fact, it may be easier to negotiate at this time. Save up cash to offer a lump-sum settlement with the creditor and begin negotiating. When you and the creditor come to a deal, make sure that you get the agreement in writing that the amount that you settle for is settlement in full for the debt. Then, send a money order or bank check in to the creditor. Never give them access to your checking account electronically.
After the Judgment
After the judgment, many creditors still will not move to enforce their judgment quickly. If you live in a state that permits garnishment of wages, the creditor may seek an order allowing them to do this. A debtor's goal after the judgment should be to save up cash, and still attempt to settle the debt for less than what he owes, particularly on an older debt. If the creditor moves toward garnishment for collection of the judgment, and the debtor is unable to settle, bankruptcy may be the only choice to stop the creditor from taking a large percentage of the debtor's income.
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