Collecting Debt is a Business of Attaining Default Judgments

In the battle between creditor and debtor it is important to understand the difference between the threat of a lawsuit and an actual summons, complaint, court date and legal proceeding. A creditor cannot “take out” a judgment against you or “freeze” your bank account or garnishee your paycheck without the matter going before a judge.

Many debt collectors use the threat of suing because they think a consumer who owes a debt will be judged as such in court.  This is not always the case. 

Remember the old adage, “You are innocent until proven guilty.”  Unfortunately the thinking of most consumers, who owe credit card debt, is that they cannot afford to defend themselves in a lawsuit and, if a summons does arrive, they just sit hopelessly and bury their head in the sand and they do not respond or “answer” the summons and complaint.

The main reason credit card debt summonses get sent is because the collection
law firm has profiled certain consumers as unlikely to respond to the summons,
which could result in a default judgment. In many jurisdictions approximately
95 percent of the consumer debt judgments are issued by default.  Once the judgment is issues, either by default or decision, interest and other fees can be added.  It is at this point that your assets can be seized or frozen.

The process of initiating a court summons varies from state to state. In some
states a collection attorney can send a consumer a “pocket” summons which is
undocumented and, therefore, invalid and meant only to intimidate the consumer.
If the consumer responds properly, then the collection attorney often does
nothing more because the cost associated with the actual filing of a summons
and complaint combined with the expense of actually sending an attorney to
court, sometimes for multiple appearances, is prohibitive. If the consumer does not respond, then the collection attorney files the paperwork with the court and waits for a default judgment. This is known as “scraping off the cream,” or easy accounts, in the collection business.

Collecting credit card debt is a business of attaining default judgments. Most major
credit card issuers are not prepared to produce the documentation demanded by a consumer's competent answer to their summons. In an actual credit card debt
summons and court proceeding being prepared will often cause the lawsuit to go
away or to be dismissed.

It is often not as easy as it sounds and certain judges are harder on consumers
than others but it is very possible to beat the system with the proper
preparedness. In any case, filing an answer, if you are served with a summons and complaint, could result in being offered a favorable settlement as the attorney most likely will be interested in settling for a piece of the pie without the expense of a decision at trial.

Patrick Ingegno can be reached at inner-circle@optimum.net or
www.innercircledebtsolutions.com