If you neglect delinquent debt for too long in New York, creditors may take you to court. Often, the plaintiff bringing the lawsuit against you is not your original creditor but a collections company who purchased your debt. They can still take you to court if the transference is lawful, and a loss in court can result in wage garnishment if you earn a reasonable paycheck.
Understanding the legal process can help you avoid further complications and relieve some of the anxiety of facing this stressful situation.
Receiving a summons and complaint
When a plaintiff decides to take you to court, they will issue a summons and complaint. Essentially the summons calls you to court, and the complaint contains the basis for the lawsuit. including who you allegedly owe and how much. After the plaintiff serves you with these documents, you have a short window of time to respond — typically under 20 or 30 days by New York law.
Your answer is how you choose to respond to the complaint. This will include your argument against their claim. For example, you may argue that you have already paid the debt or that the amount is incorrect. Regardless of the reason, you will want to include any potential arguments you wish to use in court in your answer to the summons. A judge may not allow new arguments into the trial.
If you do not have a business relationship with the plaintiff, say so when you answer the complaint. He or she will have to produce proof that they purchased or otherwise legally own your debt.
Defending yourself in court
The defenses you can use will rely on whether the plaintiff’s complaint is true or errant. If you do not believe you owe the debt, be prepared to demonstrate why and to show evidence that you do not owe the money. Is it a case of mistaken or stolen identity? Did you already pay the debt or discharge it in bankruptcy? If so, you will want to include this in your answer.
If the complaint is true and you do owe the debt, you may still have recourse. A judge will likely rule in your favor if the lender has not dealt with you in “good faith” — upholding an unfair contract or forcing you to work out the debt payment in an unfair manner. Other times, the plaintiff has waited too long and has passed the legal window to bring a lawsuit.
If you are able to prove any of these claims before a judge, the court will likely rule in your favor. If not, and you are truly unable to pay, you may consider filing for bankruptcy.