Consumer Debt Defense Answers

Once you are served with a petition, Louisiana and Texas law requires that you respond to the petition within specific time delays. Failure to respond to a petition within the delays allowed by law, can result in a judgment in favor of the petitioner (creditor), and further, result in the creditor being allowed to garnish your wages, your bank account(s), and/or place liens on your property. An answer to the petition must be filed within the time delays listed on the served notice.

It is possible that you have a one of several defenses to the lawsuit, including, but not limited to, that the debt is not your debt, the amount owed is incorrect, you’ve never done business with the creditor, the interest rate charged was unconscionable (illegally unfair), or that the lawsuit is prescribed (expired). These defenses are potential ways to get the debt litigation lawsuit successfully dismissed with no payments to the creditor.

When a petition is filed against you by a creditor, it is necessary that a response is filed within the legal time delays, or there may be judgment rendered against you. Additionally, petitions are sometimes served with questions and requests for documents that a layperson, like yourself, may not understand or know how to respond to.

As your attorney, I will review your individual case to determine what defenses and/or counterclaims, if any, you may have and ensure that I respond to the petition and discovery within the delays allowed by law.

After a response is filed, a trial and/or hearing is usually the next step in the litigation process. Attending hearings and/or trials can be intimidating for someone who doesn’t have knowledge of the court processes, and it also takes valuable time from your work or home life. As your attorney, I will attend all court hearings and/or trials on your behalf, and, in most cases, you will not need to be present.

What happens if the debt if I can’t defend the lawsuit: If you are in fact responsible for the debt, and have no clear defense to the lawsuit, most creditors are willing to enter in negotiations to settle the lawsuit. Settling the lawsuit can entail reduction in the total amount of the debt and/or an agreement that the creditor will not seek additional fees, such as attorney fees and/or court costs.

There is no clear answer for this question. Debt negotiation depends on many factors, including, but not limited to, the creditor, the amount of the debt, the consumer’s financial hardship, and the consumer’s history with the creditor. There are some creditors that are willing to reduce a debt by forty percent (40%), others are only willing to reduce the debt by (18%), still there are some creditors (i.e., Tower loans, Republic Finance), that are typically not willing to reduce the debt at all.

Debt negotiation can have an adverse impact to your credit, possibly damaging your credit history.

Yes. There are tax consequences for settling a debt for less than the full balance. It’s best to speak with a tax professional for more accurate information.