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I’ve been sued by a creditor. Is Bankruptcy the only option?

I’ve been sued by a creditor. Is Bankruptcy the only option?

In short, no. Bankruptcy is a big step. You should consider all your legal options before deciding if you should file. A thorough examination of the disputed amount, type, and status of your debt situation is very important. I recently helped a pro bono client through a local Legal Aid provider. She was convinced that she needed to file bankruptcy. She had several outstanding debts and was currently in the process of trying to defend herself pro se in the Justice of the Peace Court against a third party debt buyer company.

A debt buyer is a company that buys up large portfolios of accounts that have been charged off by the original creditor. They file their suits in County or Justice Courts, hoping you will ignore them. Their case goes to court, with or without you. If you do not defend yourself, the court will award them a default judgment. However, they frequently lack the documentation that they need to prove their cases. In this particular case, once I filed an appearance and served some discovery, the plaintiff was very quick to non-suit their case. A more thorough review of her debt portfolio revealed that the majority of my client’s total debt was held by debt buyers. My client ultimately elected not to file bankruptcy. She is now back in control of her monthly bills and very happy.

There are a number of factors to consider if you are thinking of filing for bankruptcy. Call me to find out more. Let me help you decide your best legal options for your situation.