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What to Do if You Are Being Sued for Debts in Pennsylvania?

Having debt is pretty normal, and most people have some debts they are working on paying back. If you fall behind on payments, you might land in some trouble. Fall too far behind, and creditors might take legal action.

If you are being sued for unpaid debts, creditors might try to take you to court to get the money you owe. If you do not have the money, they might seize assets, have liens placed on property, or garnish your wages. If you find yourself on the wrong end of a lawsuit, an attorney can help you take the necessary steps to protect yourself. You should always answer the lawsuit to avoid a summary judgment. With the help of a qualified attorney, you can file for bankruptcy to reconfigure your finances and hopefully have some debts discharged. There might be several bankruptcy chapters you can file under, and the best one is the one that suits your needs and helps you avoid a lawsuit.

Talk to our Pennsylvania bankruptcy attorneys in a free case evaluation by calling Young, Marr, Mallis & Associates at (215) 701-6519.

What Happens if You Are Sued for Debts in Pennsylvania?

Falling behind on bills is not that unusual, but it is still something to be avoided. Normally, creditors are willing to look past one or two late payments as long as you make those payments as soon as possible. If you fall too far behind on payments, usually more than a few months, the creditor might take legal action and sue you for the unpaid debts.

If the creditor sues you and wins, you might be in a very tough situation. The creditor can have the court or sheriff seize your assets to pay for the debts. This kind of sale, known as a levy, execution sale, or sheriff’s sale, may only happen after the creditor wins the lawsuit. They might also place a lien on your property or have the court garnish your wages to get the money they are owed.

Once a creditor files a lawsuit against you for unpaid debts, it might be hard to defend yourself, even when your inability to pay is not your fault. You might have lost your job, become very ill, or suffered from bad investment advice. The courts do not care, and you might lose if the case against you gets to court. An attorney can help you take steps to cut the case short and rearrange your finances so you can start over with a clean slate.

How to Protect Yourself When Being Sued for Debts in Pennsylvania

Protecting yourself in a lawsuit for unpaid debts should begin with a good lawyer. Once you have hired legal counsel, you can answer the lawsuit. While the lawsuit is pending, our Bensalem, PA bankruptcy attorneys can help you file for bankruptcy in the hopes of having some of your debts discharged.

Speak to a Lawyer

When you have been served with notice of a lawsuit, the first thing you should do is speak with a qualified attorney. Since the lawsuit is over unpaid debts, it might be best to speak with an attorney familiar with finances and bankruptcy.

It is also important to speak with an attorney familiar with lawsuits for unpaid debts because the lawsuit might not be totally valid. Creditors might threaten to file lawsuits prematurely to frighten people into paying them faster. An attorney can help you determine whether the claims against you are valid or bogus.

Answer the Lawsuit

No matter what you and your attorney decide, you must answer the lawsuit. When the other party files the initial complaint for unpaid debts, they must also serve you notice of the complaint. Once you have that notice, you have a limited time to file your answer with the court.

Ignoring the complaint will not make it go away. In fact, it will probably make your problem much worse. If the time limit to answer passes and you have not yet answered, the other party may file a motion for summary judgment against you. This means you would automatically lose the case because you did not respond to the claims against you.

File for Bankruptcy

One way to combat the lawsuit against you is to file for bankruptcy. While this might sound like adding insult to injury, it might be the solution to your problems. When you file for bankruptcy, an automatic stay is placed on proceedings against you regarding unpaid debts. This includes things like foreclosures and lawsuits for unpaid debts. While the stay is in place, creditors cannot come after you for unpaid debts.

The good thing about filing for bankruptcy is that the court might discharge certain debts. Credit cards, medical bills, and other debts might be discharged, meaning you would no longer be liable for payment.

This is not a get-out-jail-free card, and there are some tradeoffs. Depending on which bankruptcy chapter you file under, you might have to spend years on a strict payment plan or liquidate assets to pay off debts before anything is discharged. However, if the unpaid debts you are being sued for are discharged, the lawsuit will be dropped.

How Bankruptcy Can Help You When You Are Sued for Debts in Pennsylvania

There are numerous federal bankruptcy chapters under which you might file. These chapters are designed to help people in different financial situations file for bankruptcy and escape their debts.

Under Chapter 13, you can devise a payment plan to help you catch up on unpaid debts. Generally, people are on these payment plans for at least a few years before the courts agree to discharge debts. The idea is that, while keeping up with the payment plan, you can repay as much of your debts as possible. In the end, creditors get at least some of their money, and you can escape many other debts.

What makes Chapter 13 so appealing to many homeowners is that you do not usually have to sell off assets to pay the bills.

Chapter 7 bankruptcy is different and tends to be completed much faster. You would liquidate much of your assets, including homes, vehicles, and other properties. The proceeds from liquidation would be used to pay off debts. Once that is completed, a judge might discharge the remaining debts, and you can start over fresh.