Am I being sued?

In Minnesota, court rules allow a creditor (almost always through an attorney) to sue someone in such a way that many people don’t think they’re actually being sued!  Minnesota rules of civil procedure allow a creditor’s attorney to sue someone by mailing them a summons and complaint.  These forms state “you are being sued” but do not have any court date or court file number or other “official” looking information on them, so many people don’t think they are official forms.  However, once a creditor’s attorney mails a person a summons and complaint, that person then has 21 days to respond to the complaint by sending the creditor’s attorney an official response called an answer.  If the person being sued does not respond to the creditor within 21 days, the creditor’s attorney can file the summons and complaint along with an affidavit of service and an affidavit of no answer in the district court and get a judgment automatically, without any hearing or further notice.  Once a judgment is entered, the creditor’s attorney can try to pay itself with the person’s money by garnishing their wages or levying their bank account.

What do I do if I am being sued?

You have several options.  First, you can respond to the complaint by writing an answer and mailing it to the creditor’s attorney.  The answer is what is called a responsive pleading, and responds directly to the complaint.  The answer is your chance to admit or deny the claims made in the complaint, to explain your side of the story, and to raise affirmative defenses, such as that the creditor is suing the wrong person, the debt is too old, or the debt has already been paid off (among other defenses).  By sending an answer to the creditor’s attorney, you are standing up to defend yourself.  The creditor’s attorney must then file the complaint and answer in the district court, which will become an official court file, and set the matter on for a trial.  The next step is then what is known as discovery–in which each party can demand information and evidence from the other party.

Second, you can contact the creditor’s attorney to pay the debt in full.  Getting the debt paid is the goal of the lawsuit, and the creditor’s attorney will be very happy to accept payment on behalf of their client.  Payment can be made all in one lump-sum payoff, or can be arranged over a series of monthly payments.

Third, it is often possible to try to settle the debt by negotiating an agreement to pay less than the full amount of the debt in exchange for the creditor agreeing to drop the lawsuit once the settlement is paid.  Debts can be settled by making a single lump-sum settlement payment or by working out a series of payments to pay off an agreed settlement total.  Prescott Pearson & Tande regularly helps individuals and businesses resolve debt by arranging settlements of debts.  Contact us today if you would like to discuss settling your debts.

Fourth, you can file bankruptcy.  Filing bankruptcy immediately stops civil lawsuits against you, and protects you from further collection action.  Often filing bankruptcy is far cheaper and faster than fighting the lawsuit or trying to settle with the creditor.

Which option is best?

Determining which option is best is a complicated decision based on the individual facts and circumstances of your case.  The attorneys and staff at Prescott Pearson & Tande are always happy to discuss the details of your situation to give you our guidance and advice, and you should feel free to contact us to discuss your situation.  Generally speaking, if the debt is not yours, it is past the statute of limitations, or you have other circumstances or defenses you want to raise to a court, filing an answer will give you the chance to have a Judge decide whether you owe the debt.  If you don’t have any defenses to raise and the debt is yours, filing an answer will only delay a judgment, but won’t usually result in the case being dismissed, and in such circumstances it may be best to look at other options.  In cases in which the debt is small or you don’t want to damage your credit and you can afford to pay it, then setting up a payment or settlement is a good option.  However, if the debt seems too much to handle or pay off, then filing bankruptcy is most often faster, cheaper, and far less stressful than trying to continue dealing with the debt yourself.