You Lose: If the credit card or debt collection company wins, it will ask the judge for authority to collect its money. Your wages could be garnished. Liens could be placed on your property or forced into a sale.
The Bottom Line. It's not possible to go to jail simply for having unpaid debt. It also requires many steps along the way before an arrest for contempt of court is possible: The creditor must first sue you and win the lawsuit, and then the judge must award a judgment against you.
If you do not show up to court, the attorney for the credit card company can enter a default judgment against you and basically they would get a judgment for the amount of money in the complaint plus attorney fees and interest.
If you ignore the summons, the plaintiff is eligible to receive a default judgment from the court, in an amount ascertained by affidavit, verified pleading, and other evidence certified by the court. The judgment can be executed against certain nonexempt assets of yours, and can be detrimental to your credit.
Ignoring or avoiding the debt collector may cause the debt collector to use other methods to try to collect the debt, including a lawsuit against you. If you are unable to come to an agreement with a debt collector, you may want to contact an attorney who can provide you with legal advice about your situation.
It is not an order, so you do not have to do what it says. But, if you ignore a summons, you will likely lose the case against you. The court will usually decide the lawsuit in favor of the person suing you. The court could decide that you have to pay money or that you must stop doing something.
The plaintiff might attempt wage garnishment or bank account levies. Some defendants might be considered “judgment proof” if they have no assets. Possible Outcomes and Future Collection: Judgments remain active for several years and could be renewed.
If you pay off your debt or negotiate an agreement with the debt collector to pay a lesser amount before going to trial, you can settle your case and have it dismissed. But be aware that your case won't be dismissed automatically if you settle. Make sure the Plaintiff dismisses the case.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
When a company claims you didn't pay back a debt, the company (creditor) can file a lawsuit against you in court.
If you win your lawsuit but the responsible party has no money, they are still legally required to pay you. In the meantime, legal funding or pre-settlement lawsuit loans can help you manage expenses like mortgage payments and other financial obligations.
If you continue not to pay, you'll hurt your credit score and you risk losing your property or having your wages or bank account garnished.
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
The time frame varies from state-to-state but is generally 3-6 years. It most often arises in civil matters where consumer debt is considered “time-barred,” meaning the statute of limitations has expired. Legal actions and threats of legal actions are prohibited when the case is time barred.
In a Nutshell
Though there's no set timeline, you can expect legal action after six months of nonpayment. While there are no guarantees, you're less likely to be sued if you owe less than $2,000.
Lawsuits and Judgments
Just like tax liens, judgments from lawsuits are not included in credit reports or factored into a credit score. An employer that conducts a background check, though, will likely receive this information because it's part of public records.
Typically, debt collectors will only pursue legal action when the amount owed is in excess of $5,000, but they can sue for less. “If they do sue, you need to show up at court,” says Lewis-Parks.
If you're sued, you can choose to do nothing. This means that you do not file any response by the deadline. The Plaintiff then can ask the judge to decide the case without your input. This is called a default or a default judgment.
More frequently than most consumers probably realize. While precise statistics are difficult to come by, legal experts estimate that several million debt collection lawsuits get filed across the United States every single year.
A long time ago, it was legal for people to go to jail over unpaid debts. Fortunately, debtors' prisons were outlawed by Congress in 1833. As a result, you can't go to jail for owing unpaid debts anymore.
A summons is just a letter sent by the court asking you to come to court to handle your case. It does not require you to do anything except go to court. If you don't show up to court, the judge may issue an arrest warrant for your failure to appear.
Technically, you can refuse to be served papers. It isn't illegal to run away from a process server, but it isn't advisable either. There are negative consequences when you refuse to be served the appropriate paperwork.
If you thought that not accepting court papers would simply make the problem go away, that's not going to happen. Instead, avoiding service of process can delay being served, which could ultimately lead to a default judgment against you.