A Tale of Two Debtors
Normal Enough to Start
There were once two people who had a lot of credit card debt. Let's call them Jane and Ingrid. Both Jane and Ingrid went to college for four years and had a hard time finding a job after. They used credit cards to buy groceries and other things, not because they were spending all of their money on fun things, but because they had no other choice. After a few months, Jane and Ingrid each came down with a bad case of pneumonia and had to spend some time in the hospital. The bills piled up. After a few years of living as frugally as they could, Jane and Ingrid had paid off most of their credit card debt but were still buried in debt from their stay in the hospital. The debt was insurmountable. Each considered bankruptcy but decided against it. Eventually, the hospital stopped sending bills and Jane and Ingrid forgot about it.
An unsurprising twist
A few years after their stay in the hospital, Jane and Ingrid each came home from work to find something taped to their door. When they opened it, they saw that it was a "Summons and Complaint." Each was being sued for the hospital debt, attorney's fees, and other charges they did not recall ever agreeing to. Even worse, the company suing them was "Consolidated Credit Management Services, Ltd.", a company they had never heard of. They didn't know what to do. And that is where the story diverges.
What Ingrid Did
Ingrid did nothing. She threw the papers out and forgot all about it. Six months later, she noticed that her paycheck was short. Someone was garnishing her paycheck each week. She talked to her employer and they told her there was nothing they could do. She checked her credit report (which had improved greatly) and found a judgment against her. She went down to the local courthouse and found out that CCMS had taken a default judgment against her and was garnishing her wages. With a chunk of her wages going to CCMS each month, she began to fall behind on other bills. She called CCMS and tried to negotiate a settlement, but they told her no. They said "Why would we negotiate? We're getting paid every week right now!" Eventually the bills got to be too much and Ingrid was falling behind again. She talked to a lawyer and ended up filing for bankruptcy. In a way, she was lucky. The debt was medical debt so it was dischargeable in bankruptcy. If it had been student loan debt, she would still be paying it to this day.
What Jane Did
Jane did something. Jane looked over the papers, saw that she was being sued by a random company, and called a lawyer. The lawyer reviewed all the paperwork and agreed to defend the case for her. After looking at the case more closely, the lawyer found big problems with the debt collector's paperwork. They could not prove they owned the debt. The lawyer, seeing that they had brought a lawsuit without the documents they needed to win it, filed a lawsuit against them for violating the Fair Debt Collection Practices Act. Afraid that they would end up paying Jane and her lawyer instead of the other way around, CCMS agreed to dismiss their case against Jane entirely. Her lawyer made sure that the dismissal was permanent—they could not bring the lawsuit back another time. The debt was effectively gone and Jane was free.
Both Jane and Ingrid dealt with their debt in different ways. Ingrid's circumstances might have turned out better if she had called a lawyer at the outset but she was still able to find help.
The Moral of the Story
The point? If you have a boatload of debt and get sued, it's better to defend the case than to ignore it. But if you already ignored it, there's still light at the end of the tunnel. We can help.