Can a creditor sue a debt settlement company?

However, until that point, a creditor may sue you, and if the debt settlement program is one in which you pay the debt settlement company and they hold onto your payments, not turning them over to the creditor, it’s fairly common to be sued: you and the debt settlement company have no legal right to withhold payments from a creditor.

Can a company be sued by its own name?

It can sue and be sued by its own name. It follows that the company’s liabilities are then entirely of its own and not those of its members. If the company breached a contract or incurs debt and liabilities, the company must be sued and not its members or directors.

Who is personally liable if a company is sued?

The “veil” that is the company, in effect, protects them. Therefore, any liabilities that result out of the suing action are borne only by the company. You, as a director, are not personally liable, and your personal assets will, generally speaking, not be available to meet any claim.

What happens if a debt collector sues me?

Warning: You also may lose the ability to dispute that you owe the debt if a court issues a judgment against you. A judgment is a court order. Only the court can change it. It’s very difficult to get a judgment changed or set aside once the case is over.

When does a debt collection agency Sue You?

While each case is a little different, and different states and courts have different rules, here’s what generally happens if a collection agency sues you for nonpayment of a debt. A debt collection lawsuit begins when the collection agency files a “complaint” (sometimes called a “petition”) in court.

What happens when you get sued for debt?

One attorney at a debt collection firm filed 69,000 lawsuits in a single year, it found. A debt collection lawsuit begins when a creditor files a complaint with a state civil court listing you as a defendant, along with your co-signer if you have one. The complaint will say why the creditor is suing you and what it wants.

How to defend yourself in a debt collection lawsuit?

File the Answer with the Clerk of Court. Ask for a stamped copy of the Answer from the Clerk of Court. Send the stamped copy certified mail to the plaintiff.

What does discovery mean in a debt collection case?

“ Discovery ” refers to the formal procedures that parties in a lawsuit use to get information and documents from each other to prepare for trial or settle the case. If you don’t raise any defenses or counterclaims, the collector probably won’t engage in discovery.