What can You do if a Debt Collector Filed a Lawsuit Against You?

Bankruptcy attorney Ben Tobey answering the question: What happens with lawsuits that are pending against me when I file bankruptcy?


If all those debt collector threats led to a lawsuit, you need to act quickly. If you are being sued by a debt collector, you have no time to waste. In North Carolina, a creditor only needs to prove that the debtor owes the debt in order to obtain a judgment.

unwanted-phone-call-debt-collector-Charlotte-Monroe-Lake-Norman-Bankruptcy-Lawyer-225x300Thus, in the majority of lawsuits against debtors, debt collectors can easily get a favorable judgment. Once a judgment is satisfied, the collector can employ various tactics to collect the debt, including but not limited to:

  • Wage garnishment;
  • Levying your property and bank account; and
  • Placing a lien on your property.

Luckily, a knowledgeable bankruptcy attorney in North Carolina can help you deal with the lawsuit filed by a debt collector and prevent the collector from gaining a judgment.

Related: Five illegal debt collection practices.


What to do if You are Being Sued by a Debt Collector

Once you find out that the debt collector filed a lawsuit against you, the first thing you should do is collect information about your assets and finances, including any property or assets that could be sold off to repay the debt.

After the debt collector obtains a judgment, they will be targeting all of your valuable assets that could be used to repay the debt. As you collect the financial information, you need to consult with a Charlotte bankruptcy attorney to help you negotiate a settlement with the debt collector.

Another way to deal with a lawsuit filed by a debt collector is to file for bankruptcy, though there may be alternatives to bankruptcy.

Related: Filing for bankruptcy on a judgment in North Carolina.


Filing for Bankruptcy After a Debt Collector Filed a Lawsuit

Being sued by a debt collector is a common reason why people decide to file for bankruptcy. A bankruptcy filing automatically stops all debt collection efforts, including the lawsuit.

Once you file for bankruptcy, the lawsuit is dismissed until your case is settled (the so-called “automatic stay”). The automatic stay order gives the court time to review the debtor’s available assets and divide them among the creditors.

Depending on your financial situation and income, you may be able to file under Chapter 7 or Chapter 13 bankruptcy. With Chapter 7, you may be able to discharge the debt altogether, while Chapter 13 allows you to create a plan of reorganization.

While not all debtors benefit from filing for bankruptcy, it may be the only viable option for debtors who are being sued by a debt collector. Filing for bankruptcy is definitely a better alternative to having your wages garnished, your bank account frozen, or having a lien on your property. It is advisable to consult with a bankruptcy attorney if you are being sued by a debt collector in North Carolina. Contact our results-driven lawyers at Arnold & Smith, PLLC, to schedule a consultation. Call our lawyers at Arnold & Smith, PLLC, at (704) 370-2828 to evaluate your options or fill out our contact form. Now taking cases throughout North Carolina with offices in Uptown Charlotte, Mooresville and Monroe.






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Five Illegal Debt Collection Practices in North Carolina

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