If a creditor or collection agency sues you for nonpayment of a debt, it’ll serve you with a complaint and you have the opportunity to respond. If you respond to the suit, the case then gets underway with discovery, settlement conferences, motions for summary judgment, and perhaps a trial. (To learn how a creditor lawsuit begins, including receiving a summons and complaint and responding to the lawsuit, see Creditor Lawsuits: How the Case Begins.)
Here’s what to expect as your creditor lawsuit winds its way through court.
Once you file and serve your response to the creditor lawsuit, you'll receive written notification of all further proceedings in your case.
Routine cases. If yours is a routine debt collection case, the next paper you will probably receive is a notice of the plaintiff’s request for a trial and date. The paper after that will probably be a notice of the trial date. In some courts, however, you will be sent a notice of a settlement conference before the trial date. Be sure to attend the settlement conference or trial. If you move, make sure you notify the plaintiff and court of your address change.
Non-routine cases. If yours isn’t a routine debt collection case, or the creditor’s lawyer wants to play the litigation game, a whole lot can go on between the time you file your answer and any counterclaim and the time you get a notice of the trial. You might want to take the offensive with some of this, especially if you filed a counterclaim. Below is a brief description of the most common of these proceedings. It’s difficult for someone without a lawyer to undertake them, but it’s not impossible. (These descriptions are not meant to be a detailed account of how to cope with court procedures. For that, you’ll want to look at Nolo’s Represent Yourself in Court, by Paul Bergman and Sara Berman.)
Discovery refers to the formal procedures used by parties to obtain information and documents from each other and from witnesses. The information is meant to help the party prepare for trial or settle the case. In routine debt collection cases where you don’t have any defense, don’t expect the plaintiff to engage in discovery. Discovery can be expensive, and, quite frankly, there is often nothing for the plaintiff to “discover.” You owe the money. You haven’t paid. (Read about different options for dealing with your debt.)
If you raise a strong affirmative defense or file your own counterclaim, however, you and the plaintiff may want to engage in discovery. Here are brief definitions of the primary discovery methods.
Deposition. A proceeding in which a witness or party is asked to answer questions orally under oath. A court reporter is present and takes down the entire proceeding. If you schedule a deposition of someone, you will probably have to pay for the court reporter, which can be very expensive. (To learn more, get a copy of Nolo’s Deposition Handbook, by Paul Bergman and Albert Moore.)
Interrogatories. Written questions sent by one party to the other to be answered in writing under oath.
Request for production of documents. A request from one party to the other to hand over certain defined documents. If you are adamant in your defense of a lawsuit that you paid the debt, the other side will most likely request that you produce for inspection (and copying) a check, money order receipt, or other document supporting your assertion.
Request for admissions. A request from one party to the other to admit or deny certain allegations in the lawsuit.
Request for inspection. A request by one party to look at tangible items (other than writings) in the possession of the other party. For instance, if you raise as an affirmative defense that the painter who sued you spilled paint on your rug and it cannot be removed, the painter may request to inspect the rug.
Request for physical examination. A request by one party that the other party be examined by a doctor if the other party’s health is at issue.
Subpoena. An order telling a witness to appear at a deposition.
Subpoena duces tecum. An order telling a witness to bring certain documents to a deposition or hearing.
In some states, the trend is toward limiting discovery. For example in some states, parties to a lawsuit can ask only a limited number of questions in their interrogatories and a party or witness can be deposed only once. If the creditor sends you volumes of interrogatory questions or schedules your deposition after it’s already been taken, you can ask the court to issue a “protective order” to stop the harassment.
Be sure to answer discovery requests in the time allowed, even if it’s just to say you don’t know the answer. Otherwise, the plaintiff may ask the court to compel you to answer and to pay costs for their trouble. Or you may be deemed to have admitted the plaintiff’s assertions (“requests for admissions”). If the plaintiff (or its attorney) agrees to let you have more time to answer, get it in writing. Send a letter confirming the extension of time to the plaintiff (or its attorney).
The creditor may try to convince the judge that none of the facts of the case are in dispute—for example, that you signed a legal loan agreement, made no payments, and have no defense as to why you’re not paying. The creditor also must convince the judge that the plaintiff is entitled to judgment as a matter of law. The creditor does this by filing a summary judgment motion. If the judge agrees with the creditor, the judge can enter a judgment against you without any trial taking place. The creditor should not win if there are any material (important) facts in dispute (for example, if you claim you didn’t sign the agreement).
You usually must file papers opposing the creditor’s summary judgment motion if you want to fight it. If you don’t, you’ll probably lose. Because responding to a summary judgment motion can be complicated, and because the entire lawsuit is at stake, you might want to consult with an attorney.
Several states and the federal court system require that the parties come together at least once before the trial to try to settle the case. To assist you in settling, you’ll be scheduled to meet with a judge or attorney who has some familiarity with the area of law your case involves. You don’t have to settle, but the judge or attorney will usually give you an honest indication of your chance of winning in a trial.
The vast majority of cases do not go to trial. They settle or end in summary judgment or a similar proceeding. But once discovery is complete, any summary judgment motion is denied, and settlement efforts have gone nowhere, you will eventually find yourself at a trial. In a trial, a judge makes all the legal decisions, such as whether or not a particular item of evidence can be used. Either a judge or a jury makes the factual decisions, such as whether or not the item sold to you was defective.
At the trial, you will be required to present your case according to very specific rules of procedure and evidence. (Get tips for success in the courtroom.)
If you need help responding to a lawsuit for nonpayment of a debt, consider hiring a lawyer. But keep this in mind: If it costs more to hire a lawyer than what the creditor seeks in the lawsuit, it makes little sense to seek attorney assistance.