George Simons | June 27, 2023
Edited by Hannah Locklear
Summary: You can use SoloSuit to respond to a debt lawsuit, file a Motion to Compel Arbitration, or settle the debt before going to court. Join our live webinars to ask your own questions about how to resolve a debt lawsuit.
The following is a transcript for one of our webinars. In it, SoloSuit's founder George Simons responds to live questions from consumers.
Disclaimer: this post is not legal advice. George is not a lawyer.
Thank you. All right, looks like we are live. I'm George, co-founder of SoloSuit. Thanks for coming to our webinar. We're going to go over the basics on how to resolve a debt lawsuit tonight.
If you are already a SoloSuit customer, or if you're just finding out about SoloSuit for the first time now, glad that you are here. We're going to get you what you need. I'm going to go over some of the basics here in just the first few minutes. And then here in just a little bit, we're going to take your questions and hopefully give you some answers.
If you have questions, you can put them into the YouTube chat. Our team member Hannah is also going to be responding to the chat. Then I'll go ahead and respond to some questions live as well.
Before we get started, I just want to give a disclaimer saying that I am not an attorney. I'm not your attorney. SoloSuit isn't a law firm, and this isn't legal advice. All right? This does not replace the consultation of a lawyer. And those are some things that I need to say because of regulations on the provision of legal services.
All right, so jumping into things…
First, we got some good news, which is that people who use SoloSuit enjoy about a 70% win rate. Without SoloSuit, people barely win no more than 10% of the time. Usually they can't even manage to respond to the debt lawsuit when they're sued for debt.
With SoloSuit, we get about a 70% win rate. So we increase the win rate by seven X. What that means is your case might settle. So you might respond to a debt lawsuit. Then you get a settlement agreement where you might get thousands of dollars hacked off your debt, right?
Let's say you're being sued for $10,000, then you settle it for $4,000. That's a big win. And we consider that a win. Another thing that might happen is you might get your case dismissed, so you might respond to the lawsuit and then the collector might find out, oh, you know, I'm suing the wrong person. I'm just going to dismiss this case and remove it from court. That's a huge win. Means you don't end up paying anything in that case.
And then some of the time the case is ongoing, right? So we protect you from a default judgment. The case progresses normally, which means you might have to show up in court and you might also have to respond to some additional documents, but it gives you time to file for bankruptcy if you want to. Also it just makes sure you didn't lose by default judgment and protects you from that bad loss. It gives you a better chance in court.
All right. As you're finding out, debt sharks oftentimes exploit people, use the system to exploit them. We take the real life example of Raquel. She's down on her luck. Get sued for $1,000 debt. She wants to respond to the debt lawsuit. And first she goes to an attorney. She finds that the attorney wants like $3,000 just to respond, just to get started. She doesn't have money for that, of course.
Then she tries going to, like, free legal aid or pro bono clinic, which finds out they take three weeks just to get started. And she doesn't have time for that.
So she tries doing it herself. She tries the DIY solution, but then she finds out even after she's generated the Answer document, she needs the mailing address for the court. She needs to calculate the filing fee. She probably needs a printer, and she needs to use snail mail. She hasn't done that in like 20 years. She has to go onto the USPS. And mail the document in, or she has to take time off work, go down to the court herself. And she only has like 21 days to respond. So unfortunately, she misses this 21 day deadline. And then practically overnight, $1,000 debt balloons into like a $3,600 judgment. That's bad news for Raquel.
So we don't want that to happen to you. And we're going to show you how to avoid that situation here with SoloSuit. So we make it easy to respond to a debt lawsuit.
You can use us to answer the lawsuit, and then if it's a credit card debt with an arbitration clause, you can use our documents to compel arbitration.
And then if you're like most of our people, you'll ultimately want to settle the debt for less and save hopefully thousands of dollars by settling and getting it all nice and wrapped up, nice and tidy like.
So those are kind of a basic idea, right?
So if you want to answer the lawsuit, basically just go to SoloSuit.com and find our Debt Answer, or just click the “Reply to a Lawsuit” button. Then we’ll ask you some questions. You give us some answers. We use the answers to generate the Answer document. You can pay us to have an attorney review the document and to file it for you in court. We make it really easy. It could be done in 15 minutes.
You can use our Motion to Compel Arbitration. You have to file that one on your own. Fortunately, you can use that to force the lawsuit into arbitration.
Then you can use our new tool, SoloSettle, to settle the debt. You can use it to make an offer to the collector. You can engage in a negotiation back and forth with the collector, and then we'll protect your financial information and help you get the collector paid.
So those are the basics. Let's jump into some questions. Looks like we got some good questions getting into this.
I want you all to know that there is hope no matter how dire your situation is. About 10 million people get sued for debt every year in the US. So you're not alone, and a lot of them bounce back. I think for, for a lot of people, being sued for debt is just a stepping stone. It's a, you know, a thing that you will pass through and things will be better on the other side once you get this all resolved. It's one step. Just responding to it, fighting is one step to greater financial freedom, which is coming up for you.
All right, let's take a look.
Viewer Question: I got sued, and they served my grandmother at my old address. I'm a resident in a different state. Is there jurisdiction?
George: Great. Good question. So for a lawsuit to be valid, just like on its face, somebody needs standing. So that means there has to be a real harm usually caused. In debt lawsuits, it's the creditor hasn't been paid or the plaintiff hasn't been paid the debt.
There has to be jurisdiction of venue. So you have to be sued in the right court. So I think you're saying you used to live with your grandmother in a different state, and they served you by giving the documents to your grandmother in that state. Now you live in a different state. Is there a jurisdiction?
That's a tricky question. Ultimately, it’s one you have to kind of research a little bit more on yourself. It really depends on the facts of the situation. You might want to talk to a lawyer a little bit more about that one.
But the general idea is these lawsuits can be brought in different states. They can sue you, maybe. Arguably, you could be sued where you live in your current address, even if the debt was opened in a different state, a different address.
You could also be sued where you opened up the account. In my experience, usually you're most likely to be sued in the state where you opened up the account. That's where the debt originated. There might be a good reason for the lawsuit to go on there. It's a big pain, though, because you might have to travel back to that state to deal with the lawsuit.
But the main thing is that you can bring up a defense saying that the lawsuit is in the wrong venue if you don't see how to do it by clicking the right buttons on our website, you can just bring that up with our support person. Once you file an Answer, once you generate an Answer, and we can make sure that gets taken care of and then your Answer for you.
Generally speaking, when you receive a Complaint and Summons, you got to file an Answer document in court, and the Answer document is responding to the Complaint.
So usually you're going to respond to all the allegations in the complaint. An attorney is very likely to just deny all the allegations in the Complaint, and then you have to bring your affirmative defenses. A lot of free online court forms don't really help you bring affirmative defenses. And they're really important because you can only bring them up at this point in time in the answer document. If you don't bring them up now, you waive the right to bring them up later. So this improper venue is something that you want to bring up in the Answer document, and it really doesn't hurt to bring it up, usually.
And a lawyer will make all these defenses just like a blanket series of defenses, because if they don't bring them up now, they can't bring them up later. And it's up to the plaintiff to prove that their case is valid. It's not up to you to prove that you're not liable. It's up to them to prove that you are liable.
So you can certainly bring that up in the Answer document, and the lawyer would certainly, if there's really any question, they're going to bring that up. And then you can find out if it's a proper venue or not by contesting it in the lawsuit. All right.
Viewer Question: How often do they sue? Sounds like you're asking. It'd be helpful if you, like, said who you're talking about, what creditor you're talking about. Lawsuits are pretty common.
So just like taking the main the biggest collector in the US, which is Midland Funding, owned by Encore Capital, they do a lot of collections during the year, and I think I recall about 25% or more of their revenue coming from lawsuits. I think it might have been like 50% or more of their revenue being collected from lawsuits. So that kind of suggests that maybe they sue people about 50% of the time.
But being sued is pretty common. Most collectors, not all, kind of consider it like a last resort. So they'll try to collect first, just like by making a phone call or sending a letter. If you don't respond to that, they might send you a lawsuit. And they'll try to collect by the lawsuit.
They usually use it as a last resort because it's more expensive for them, and they have to share some of their income with the law firm, which usually they don't want to do.
Okay, again, about another way to look at it, 70 million people have debt and collections every year. Only about 10 million, Some estimates are as low as 4 million, get sued for debt every year. So that's ten divided by 70. So that's like less than 10% or a little bit more than 10% are getting sued.
Viewer Question: I used your paid Answer letter. Very simple, well worth the price. Case still pending. I was wondering if SoloSuit has a service to stop garnishments.
George: Great. Glad you used our Answer service. Glad it was great. Glad we protected you from that default judgment. That's great. Case is still pending. That's pretty common. Oftentimes cases are pending after you Answer document for a while.
Usually I wouldn't expect to see any action from the plaintiff on the account for at least a month. Most of our cases get some kind of a resolution on average in about four to six months. That's an average. The range is pretty broad, right? Sometimes things can take years to wrap up, even in these pretty simple lawsuits.
I guess I wonder if you have an ongoing garnishment. If you have an ongoing garnishment, no, we don't really have anything to help you with that. You can always try to make a settlement offer on garnishments, but it’s unclear if someone's really going to accept that if they're currently garnishing your wages.
But you can try to say, hey, I can give you $1,000 upfront right now to settle this account when the face value is like $1,500. I could pay you $1,000 right now just to wrap all this up. Maybe they take something like that if they're currently garnishing you.
Main way to stop garnishment is to respond to the lawsuit when you get the complaint and summons and then try to settle it in the lawsuit so that they don't get a judgment against you and so they don't garnish your wages.
Part of the big pain about garnishment is that once your wages are being garnished, that means that you lost the lawsuit and that means that post judgment interest has been applied to your debt. Post judgment interest can be quite significant sometimes, maybe as high as 10%, so it can be pretty problematic.
And then if if you receive the writ of garnishment but they aren't yet garnishing your wages, you can file a Motion to Set Aside Judgment, which requests that the judge give you a second chance to file an Answer, because you never did file an Answer at first, and that can be a good option. You can email us at firstname.lastname@example.org You'll get our Answer document, and you can use our Motion to Set Aside Judgment. You don’t have to file it out yourself. We can get those documents filed for you even if they are at the point where they're filing to garnish your wages but aren't yet garnishing your wages.
Viewer Question: How do you get an identity theft case dismissed at a trial setting conference?
George: Okay, so assuming that you are a victim of identity theft and that you're being sued for death that isn't yours as a result of identity theft, you definitely shouldn't lose this case, right? So you just want to bring all the documentation that you can, proving that you are a victim of identity theft.
If you have letters from a government agency, or if you've made complaints or filings with government agencies alleging that you've been a victim of identity theft, or if you have some kind of a statement from a bank or something acknowledging that you are a victim of identity theft. Bring those documents.
The key thing to remember here is that it's up to the plaintiff in this trial—it's up to the plaintiff, the person suing you, to prove that you owe the debt. It's not up to you to prove that you don't owe the debt. It's up to them to prove that you do owe the debt. Oftentimes they can't do this, especially if there's a case of identity theft. They aren't going to be able to prove that you are the one that actually owes the debt.
Maybe you can request something like a signature, like a request to see the signature on the credit card contract. There usually isn't a signature. Therefore, maybe they can't prove that to you. Those are some thoughts that come to mind on that.
Hannah, the thought occurs to me. I'm not sure if we have any articles on identity theft in particular. This is a pretty common thing with our customers. I'd love to point you to an article on our blog that covers that more in depth. I don't know if we have one yet. We'll write one, but that's the general idea.
Just make sure you have all of your documentation. Bring it to court. Make sure you show up at court. Don't miss the deadline for the hearing. Show up at the hearing. Look nice, be prepared. Just make your case that the plaintiff cannot prove that it's you, because it was not you that took out the debt.
Viewer Question: I have a little info about this credit card account. So how do I prove it's not mine?
George: That's a good question. Again, you don't have to prove that it's not yours. They have to prove that it is yours. So it's up to them to prove that it is yours.
Trying to think what attorneys oftentimes say in this case. I think the key thing might be just simply proving that your identity was stolen in some way. Maybe you can look up the history for your name or your email account to see if you are part of any data breaches. Some websites will search to see if you are subject to any data breaches.
Like maybe you were subject to the Experian data breach, and then maybe someone got your information and they use that to open up your account, open up this fake account. Maybe you could do something like that, et cetera. Those are some ideas that are coming by here.
Viewer Question: If I have been sued and would like to make an offer for the debt settlement, should I contact the lawyer or the debt collector agency to make an offer for debt settlement?
George: Good question. Usually what you want to do, what most people do, is they contact the lawyer, not the collection agency. Right.
So on the lawsuit you'll have on the Complaint, it'll show the plaintiff. It also shows a law firm. The law firm is probably going to be in the top left corner, like the heading, the letterhead of the document, or it might be on the signature. So the law firm will usually sign the complaint. The plaintiff will be in the caption, usually on the left side. The plaintiff might be, like, Discover bank. And then the law firm will be like Blitt and Gaines. And who you want to talk to is Blitt and Gaines, right? So you want to talk to the law firm.
You don't want to talk to the collection agency or the original creditor. They've hired the lawyer to settle this debt for them. So you can call the lawyer, you can call the law firm. A lot of these law firms have like, people on the phones, answering the phones all the time. You'll get one of those people.
You can also try to track down an email, send an email directly to the lawyer. You can also send a paper document. Mostly the law firms and collectors are set up to receive phone calls.
You can also use SoloSettle to settle the debt for you. You can make an offer through SoloSettle. You just tell us how much you can pay within 90 days to get the debt settled, and then we'll relay that offer to the collector for you. So that's a good way to go as well if you don't want to do it yourself.
To learn more about debt settlement, check out this video:
Viewer Question: I've been sent a scheduled docket for next week. I've already answered the lawsuit with your services. Should I settle or compel arbitration next?
George: Good question. Okay, I guess one of my questions is, is their hearing scheduled? If there's a hearing scheduled, we definitely want to make sure you show up for that hearing.
Oftentimes lawyers and collectors want to settle at the hearing, right? So if you show up, they show up. The judge will ask at the beginning of the hearing, have you guys attempted to settle yet? If not, then leave the courtroom and then go, like, try to make a settlement in the hallway or something like that.
And sometimes they will settle just like that in the hall or in a meeting room or something like that of court. As far as the case is ongoing, should you compel arbitration or settle first? I wish we had more data. I wish I could tell you definitively, this is what the data says here we don't on this.
A lot of people file a Motion to Compel Arbitration and then they're able to settle after that. Generally speaking, that's the route that we've recommended: you file a Motion to Compel Arbitration, if there's an arbitration clause, and then they might dismiss the case after that. Or you can proceed.
If they proceed, they have to probably select an arbiter, then go through with arbitration. Usually the plaintiff has to pay for arbitration, so they might just get the case dismissed after that. But if you have some money to settle, like if you could pay 60% of the total amount of the debt within the next month or within the next 90 days, then you can go forward with that. It'll probably be the easier option. It'll be more straightforward to wrap things up, get a nice, tidy resolution. Right.
Even if they do dismiss the case, they might not dismiss it with prejudice. Meaning they could sue you again for the lawsuit, for the debt. And even if they lose the lawsuit, they can still try to collect from you outside of court in some cases.
So settlement gives you the most tidy resolution to the lawsuit. If it were me, I would probably file for arbitration and then I would send an offer to settle as well. That's what I would do.
A lot of collectors tell us that they think when we talk to collectors, which we do from time to time, they tell us that the arbitration product is problematic for them. It just makes their life, like, worse and increases lawyer fees and stuff. I'm not sure if I necessarily believe that. I haven't seen the data around it. But that's kind of what they say. They say they prefer people just to settle with them.
But honestly, collectors would prefer if you just paid the total amount of the debt plus all the interest and attorneys fees and everything else. Right. So those are some thoughts on that.
Viewer Question: I made an FTC report and a police report about my stolen identity.
George: Great. Definitely bring those documents to the court. If you have, like, an FTC statement saying that they agree that your identity was stolen, that would be great. If you filed those many years ago, that would also be a good indicator that you are sincere that your identity was stolen. Just saying that to avoid a judgment of the lawsuit.
Viewer Question: I got served on February 18. I sent out and used you guys to Answer the Summons. I waited to get a response and I got a letter from Citibank lawyer to give her a call so we can settle.
George: So he got served on February 18. Use this to respond to the lawsuit. You got a letter from Citibank asking you to give her a call. Okay. So it sounds like you got sued, you responded, they wanted to settle with you. Right? They're probably asking you to give them a call so they could talk about a settlement solution with you.
For me, I would probably call them at this point in time. You've protected yourself. You've showed them you know what you're doing. You filed an Answer in court. You protected your rights. You can get on the phone, have a call with them. You should check out if you search our website or search SoloSuit on Google for a map of phone calling laws.
Hannah's made like an awesome map that shows which states you actually need the consent of the other party to record a phone call. It turns out most states you actually don't. It turns out most states you can just record a phone call just with your own consent. That's it. So I'd record that phone call.
If you do call the law firm, depending on your state, then you can see what they have for you to make an offer. Probably the most common offer we see from law firms is about 80%. That's the most common first offer. Certainly we see the most common settlement rate right now in SoloSettle is for 60%. The most common settlement rate is about 60%. So you can certainly try to get something around there on the phone.
Viewer Question: I want to send out the Motion to Compel Arbitration. Can I still do that?
George: Generally speaking, you can file a Motion to Compel Arbitration at pretty much anytime in the lawsuit. Most commonly it's done, like, right after filing an Answer. That's when most people are going to do that and it doesn't prohibit you from settling in any way.
Watch the following video to learn more about how filing a Motion to Compel Arbitration can help you win your debt lawsuit:
Viewer Question: What happens after SoloSuit sends the court the Answer? What happens next?
George: Okay, so let's say you get served a Complaint and Summons. You respond by filing the Answer document in court. What happens after that is, if you paid SoloSuit the file for you, we will send the documents into the court.
We'll give you the tracking numbers, then make sure that it gets there and that it gets filed once they receive it. And some cases we e-file, depending on the state, we actually epfile, which is nice because that's so quick. Then what happens next is one of three things usually.
So you can make an offer to settle or they'll contact you to settle. You can use SoloSettle to make an offer to settle. It's a great way to do it. Just takes a few minutes on our website. The case might get dismissed.
So the plaintiff might think, oh man, crap actually can't prove that this person owes the debt. I didn't think they were going to answer. You threw a major wrench in their machine by filing an Answer and now they realize they don't have a case, so they might just dismiss the case. So they might file a motion to dismiss. The judge will say okay, and then the case is dismissed.
And then sometimes the case will be ongoing. I don't know if it is the most common, but in some way the case is ongoing until one of those two things happens or until the next thing happens. So if it's ongoing, the plaintiff, or person that's suing you, might file a motion for summary judgment, meaning that they're asking the judge to make sure that they win outright immediately. That's like an outcome for them to file for discovery.
Okay, I'm going to try to cruise through here because I do have to wrap up pretty close to like, 5:30pm this time. If I don't get to your question, feel free to jump on next week.
We usually do these webinars every Wednesday at 5:00 p.m. Mountain Time. Right now I'm in Mountain Time. I'm in Utah. So, I've got to hop off here in just a couple of minutes here. So I'm going to try to cruise through here.
Viewer Question: Is it legal for a third party to due you? For example, the debt was with a department store account that closed and got charged off and bought from a third party, who is now suing for the debt.
George: Yes, it's definitely legal. It's very common. It's probably the most common type of lawsuit. So usually it is a third party debt buyer that's bringing these lawsuits. Right?
So, like, you have a community credit card from Victoria's Secret or something like that, and then they take that debt, they sell it to somebody else, like Midland Funding, and then Midland Funding sues you for the debt. Very common.
There's like some legislation passed, I think in the 90s, that kind of allowed debt buying to become more common. It's become a much larger market over the last few decades.
Viewer Question: Can you file a Motion to Compel Arbitration after a summary judgment is filed?
George: Yeah, generally speaking, yes. Again, I'm not certain. It kind of depends. Nuanced, depending on where you are. Generally speaking. You can file that motion, yes. If there's a motion to summary judgment, you may want to file a counter motion.
Viewer Question: My husband is being sued for a three day hospital stay in which he objected to the entire time. It actually caused him a great deal of distress. With no answers found, can these grieves help our case?
George: Not sure exactly what he means. He objected, but he's being sued for medical bills around the three day hospital.
It does seem like collectors behave differently depending on what type of debt is. Medical debt is being forgiven much more frequently these days. A lot of groups are trying to get medical debt forgiven, but if you're at this stage, it's probably not going to be forgiven.
As part of these big group forgiveness programs, you can certainly call in and explain to them your cases. Like, if your husband has ongoing hardship, like if he has a medical illness or something like that, you can explain that to him and say, hey, this is why I can't pay this debt, et cetera.
So those grievances can help. They don't go in the Answer. So the Answer isn't like a place to tell your story exactly like this. But you can bring it up in settlement.
Viewer Question: Does the amount of debt being claimed affect the direction we should take? Is a suit for $3,000 worth arbitrating?
George: Yeah. The amount of the debt the lawsuit does affect. Things like if it's a bigger debt, it's more likely that the law firm is going to continue with the lawsuit to try to collect.
We have people arbitrate, try to arbitrate for a $3,000 debt all the time. Yeah, because it doesn't cost you very much to arbitrate. Usually the credit card agreements are framed up so that the plaintiff has to pay for the arbitration.
So the key is that it probably wouldn't be worth their time to arbitrate for a $3,000 debt, so they might drop the case.
Viewer Question: I'm being sued for a debt that does not belong to me. Items purchased using my information. I never lived at the address where items were shipped. They have nothing with my signature or proof.
George: Okay, great. Just bring that up and make sure your Answer is filed. Make sure you bring that make sure you file the answer. We have some questions where you'll say, like, I never received the goods purchased. They're suing the wrong person.
You can click those buttons and we'll put that in your Answer for you. And then just make sure you bring that up in your lawsuit. If you can have written documentation around this, that would be best.
Viewer Question: I got a letter for final judgment. What should I do?
George: Not exactly sure what you're saying there. It sounds like you got a final judgment. Sometimes the collector will send you a proposed order from the court. It's different from an actual order. It's going to be kind of confusing.
An actual order, like an actual final judgment, will usually have a stamp or a certificate or a signature from the judge showing that it's the real thing. Sometimes collectors will send you, like, a proposed order, kind of as an intimidation tactic, so you just want to make sure you actually lost the case. Then you can appeal.
If you don't file an Answer, you can file a Motion to Set Aside Judgment and file an Answer. All right, last question.
Viewer Question: Do you have experience with Synchrony Bank?
George: Yes, we do. It’s a very common plaintiff, and a very common o riginal creditor for our lawsuits. Right. They back the store cards. Oftentimes the store cards have really high interest, and those are what's leading to these debt lawsuits. So yeah, Synchrony Bank… Very common we respond to them all the time. For sure.
All right, folks, just one more time. Again, this is not legal advice. I'm not an attorney. Not your attorney. There's no attorney client privilege between us or anything like that or a relationship. Good chatting with you all.
I sincerely hope that you win your case. I hope that SoloSuit can help you out. I believe in all of you. Believe all of you are going to overcome this. Things will be better after this lawsuit is resolved. Glad we could help you out. If we haven't answered your question. You can come back next week, or you can send us an email at email@example.com. Or you can check out our great blog.
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.
Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.
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