Somewhere between 30 to 50 thousand civil lawsuits are filed in Nebraska each year. Unfortunately, very few people actually bother to respond to the lawsuit and therefore suffer a Default Judgment being entered against them. I would estimate that over 90% of the debt collection lawsuits result in uncontested default judgments.
Here is what you should know if you are ever sued in civil court for an unpaid debt:
- File a WRITTEN REPLY to the lawsuit with the Clerk of the Court. The Summons you receive says that an “appropriate response” must be issued within 30 days. What that vague statement means is that the reply must be written, it must be signed, and it must be filed with the Clerk of the Court within 30 days.
- There is usually a standard form available from the Clerk of the Court called an Appearance and General Denial. Simply enter your name, address, phone number, case number and then sign the form. Have the clerk review the form and have them file it.
- If a creditor obtains a Default Judgment they will then have the power to garnish up to 25% of your paycheck and all of the money in your bank account. By filing a written answer with the Clerk of the Court you will prevent a Default Judgment from being entered.
- Demand a copy of your contract. If you are being sued on a credit card debt, demand the creditor provide you with a copy of the signed credit agreement. If the creditor cannot provide a copy of a signed agreement you win the lawsuit.
- Demand an Accounting. You have the right to review all the charges to your account.
- Request all Documents. You have the right to request all the documents relevant to the case, including the contract, billing statements, correspondence, etc. Review all their documents, both paper and electronic.
- Affirmative Defenses: In your written reply you may want to include certain affirmative defenses, such as the Statute of Limitations which bars claims that are too old. In Nebraska the Statute of Limitations on a written contract is 5 years from the date of last payment and 4 years on a verbal contract.
- Countersuit: If you were sued by someone who owes you money or who caused you damage, you have the right to assert that claim for damage against them. If the hospital is suing for unpaid medical bills but they also dropped you after surgery resulting in a broken leg, you may want to mention that in your reply.
- Seek Legal Advice: If possible, have an attorney review your written reply. The courthouse is packed with smart attorneys. Show your written reply to one of them and ask for advice. Believe it or not, most attorneys are really good people who are willing to give you some free advice.