Low Income People: Are You Being Sued?

being sued

Bankruptcy Advocates has advice for low income people who are being sued.

Assume that you are on limited income – for example $1000.00 per month in social security or disability benefits.  You pay $350.00 per month rent, your utilities run $200.00 per month, and with food and your other expenses there is no money left over at the end of the month.   You get notice that you are being sued in small claims court by a credit card company for $2500.00.  Here is our advice for you.

#1    Never, ever, ever miss a court date.   Why?  Because if you start missing court dates the court will eventually grow impatient with you and may issue a bench warrant for your arrest.  If you are arrested, the amount to bond you out frequently is the amount the creditor is owed.  In other words, your friends and family will be forced to pay your debt to bond you out.   So, always, always, always go to court.

#2    Don’t ever, ever, ever promise to pay any money.   When you do appear in court the judge frequently will ask you to talk with the creditor’s lawyer in the hallway.  That lawyer will attempt to persuade you to agree to pay the creditor some sum of money to satisfy the judgment.  But you don’t have any money to spare.   Don’t ever promise to pay money that you don’t have.   If, for example, you promise to pay $50.00 a month and you start missing payments, the creditor can go back to court and may be able to get the judge to hold you in contempt of court.   If you are in contempt of court, guess what?   You are in danger of being sent to jail for contempt.  Don’t be surprised if the judge says that you can purge yourself of the contempt by paying the entire amount due.   So –   never, ever, ever promise to pay any money.

#3    If the judge asks you if you owe the money, don’t be so quick to believe the creditor is right.   You have every right to force the creditor to prove its case.  If you don’t remember a charge, don’t assume that it is legitimate.  If you don’t remember receiving a statement, you have no obligation to agree that you received it.   In other words, force the creditor to prove its case.  The creditor may not be able to do it unless you agree to things that you are truly uncertain about.

#4    If the creditor does get a judgment against you, tell the judge early and often that all of your property is exempt from the judgment.  You may not fully understand what this means, but the judge will.  The truth is that your disability benefits and most likely the rest of your property is exempt for collection.   So, tell the judge early and often that your income and your property is exempt.

Should You File Bankruptcy If You Are Being Sued?

In the above case, there is no legal reason why this debtor needs to file bankruptcy.   Even if the creditor gets a judgment, at the end of the day, the debtor’s property is exempt.  Sometimes, however, the debtor is in poor health, and the stress of owing the money and dealing with creditors is too much.   In those cases we do recommend that the debtor file for bankruptcy.  If you are being harassed by creditors, give us a call.  At Bankruptcy Advocates, we can help sort through your problems.  The first consultation is free. 618-549-9800