How to Handle a Summons for Credit Card Debt

What should you do if you receive a summons for your credit card debt? Keep reading this guide for all the answers.

The first thing you want to do is figure out if you actually owe the debt. Ask yourself questions like:

• Is this my credit card?
• Is this the amount of money I owe my credit card company?
• If it is my credit card, have I already made this payment?

After answering these questions, you’ll want to make a strategy for how to proceed.

If you receive a summons, it should also come with another document called a “complaint.” The summons is the document that lets you know you are being sued and are required to respond. The complaint is the document that tells you exactly what your credit card company is alleging.

You Must Respond to the Summons and Complaint!

If you take nothing else away from this blog post, you must understand that you need to respond to the summons and complaint. This is true even if you owe the debt and don’t dispute it. Your state will have court rules that outline the deadline by which you must respond. You need to immediately research your court rules and figure out what that deadline is. Your case will probably be in state court, not Federal court, but as an example, the Federal court rules generally give you 21 days to respond to the summons and complaint. You can read that rule here. The summons should also state the deadline (although some underhanded creditors will not put the deadline on the summons in hopes that you don’t respond.

Responding to the summons and complaint is the most critical thing you must do at this point of the debt collection lawsuit. Answering tells the court that you received the summons and are prepared to respond to the plaintiff’s allegations.

But Credit Card Companies Don’t Want You to Respond!

Attorneys that work for credit card companies don’t receive hourly payments like some attorneys. Instead, they receive “contingency fees” meaning that they only get paid if they win the lawsuit. The lawyer will probably receive somewhere between 25 percent and 40 percent of the amount they recover from you. Considering that debts are difficult to collect on (mostly because the debtors often just don’t have the money), collecting debts is a volume game for collection attorneys. They need to file as many cases as they can and spend as little time on the cases as possible to make the business profitable. The creditors don’t want you to respond to the lawsuit because it makes it so much easier to get a judgment against you.

Responding to the Summons Gives You Leverage

If you respond to the summons and complaint, you immediately gain leverage in your negotiation with the collection attorney. You now have his or her attention, and let them know that you are serious about defending your case. If you fail to answer within the prescribed time period, the creditor will tell the judge that you failed to respond, and ask the judge to grant a “default judgment.” They will do this by filing a “motion for default judgment.” (As an aside, a “motion” is simply a document that asks the court to take a specific action). If you haven’t responded, the judge will most likely grant the default judgment without question. If you owe the debt, you might think, “Who cares? I know I owe the debt and I had no way to fight it.” This thinking is wrong! You want to avoid a default judgment at all costs. When a creditor asks for a default judgment, the creditor will also ask the judge to add additional costs and fees to the judgment. For example, the creditor may ask to include interest on the owed amount. Or the creditor may ask the judge to require you to pay their filing fee. Or the creditor may ask the judge to require you to pay other miscellaneous “collection fees” or pay the fees of the attorney. This is all just a way for the creditor make a little extra money from you. In some cases, a creditor may actually prefer obtaining a default judgment against you over having you pay the bill, because then the creditor can ask the judge to award the extra fees. These extra fees can add up and increase the amount you owe by hundreds or even thousands of dollars!

Responding to the summons and complaint gives you leverage because you let the attorney know that obtaining a judgment will not be easy. And remember, the attorney wants this to be easy. Every minute the attorney spends on your case is a minute he cannot spend on another, easier-to-collect case. The leverage comes in the form of bargaining power. Since the attorney wants to get out of this case quickly, you can try and negotiate a settlement of the debt.

For example, let’s say you owe a debt of $5,000. If you fail to answer, the credit card company will ask for a default judgment. That judgment could be $5,000, plus interest of $1,000, plus a filing fee of $300, plus a “collection fee” of $500, plus attorney fees of $2,000. The default judgment would be $8,800!

But if you respond to the summons and complaint, the credit card company doesn’t get a default judgment. And you can tell the attorney that it will take a considerable amount of time and effort to get that judgment for $5,000. Remember, the attorney wants to make this quick and easy. Will the attorney agree to take $3,500 now in exchange for knowing he will not have to spend any more time and resources chasing down money from you? Perhaps. You’ll have to use your negotiating skills from here, but you’ll be in a much better position to negotiate if you answer than if you have a default judgment for almost double the amount you owe hanging over your head.

How Do You Respond?

To respond, you’ll need to file a document called an “Answer.” You’ll notice that the credit card company’s complaint has a numbered list of allegations. Each number is referred to as a “paragraph.” You need to respond to each paragraph. For example, the complaint might say the following:

1. Credit Card Company A is registered to do business in the state of California.
2. Debtor entered into a contract with Credit Card Company A.
3. That contract required Debtor to pay Credit Card Company A the full amount owed each month on the due date.
4. Debtor now owes Credit Card Company A $5,000.
5. Debtor has not paid the $5,000 and the due date has passed.
6. Creditor requests that the court enter judgment against Debtor in the amount of $5,000 plus costs, fees and interest.

Your answer must respond to each numbered paragraph. You can answer each paragraph in one of three ways:

• “Admit”
• “Deny”
• “Defendant lacks sufficient information to admit or deny, and therefore denies”

If you admit the paragraph, the court will consider the allegation admitted. If you deny, the court will consider it denied, and if you can’t answer the question because you don’t know if the allegation is true or not, you will note that you lack sufficient information to admit or deny.

You’ll want to do your best to be truthful, but remember, if you admit you owe the debt, the judge will award a judgment against you. And even if you owed the money at one point, there may be many other defenses that justify you not paying. For example, the statute of limitations may have run. Or the credit card company may not have a copy of the contract. Or the credit card company may have sold the debt and the new creditor doesn’t have the documentation sufficient to show what you owe. If there is any question whatsoever, you should deny the allegations in the complaint. This will allow you to live another day to fight the debt. And remember, at this point, answering the summons and complaint is about obtaining leverage.

If you were answering the complaint above, your answer would look something like this:

1. Defendant lacks sufficient information to admit or deny, and therefore denies.
2. Admit.
3. Admit.
4. Deny.
5. Deny.
6. Deny.

You Also Need to Identify Affirmative Defenses

Affirmative defenses are defenses that you can show, through evidence, that would demonstrate that you don’t owe the debt. Some affirmative defenses might be:

• The statute of limitations has run (the statute of limitations is the time limit for a creditor to sue for a debt, which would be set by your state’s legislature)
• The plaintiff lacks standing to sue
• Unclean Hands (the plaintiff violated some law in generating the debt)

There could be many other types of affirmative defenses. We’ll cover affirmative defenses in another blog post, but you’ll want to research any possible affirmative defenses to include in your answer. After you’ve answered the numbered paragraphs, you’ll simply list the possible affirmative defenses in your answer.

You May Want to Include a Counterclaim

If you have a reason to sue your credit card company, you’ll want to include your lawsuit in your answer. This is called a “counterclaim.” A common reason for suing your credit card company might be that they violated the Fair Debt Collection Practices Act. Under that Act, Congress set certain rules that debt collectors must follow. If they don’t follow those rules, debtors can sue the credit card company. If you don’t include your lawsuit in a counterclaim, you might waive your claim.

Sign and Send Your Answer

After you complete your answer, you need to date and sign it. You’ll then want to add a “Certificate of Service” at the bottom. A certificate of services is just a statement that verifies that you sent a copy of your answer to the opposing attorney. You should just list the attorney’s name and address and a sentence that you mailed (or emailed, if your state’s court rules allow) a copy of the answer to the attorney. You’ll find the attorney’s name and address on the summons and complaint.

You’ll need to send a copy of the answer to two places: the court and the opposing attorney. Sending a copy to the attorney is easy. You’ll just mail (or email, if your state’s court rules allow) a copy directly to the attorney at the address on the summons and complaint. You’ll need to “file” a copy of the complaint with the court. The summons will identify the court in which you must file the answer, along with the address of the courthouse. You should call the court clerk at the courthouse and ask how they accept filings. Some courts will accept filings by email, some will accept by mail, and some will require you to drop it off in person. If you mail, don’t forget that it will take a few days for the mail to arrive at the courthouse. You have a deadline by which you must file, so if you mail, send it a few days before your deadline!

Filing Your Answer Isn’t the End

Many debtors think they can file the answer and that’s the end of it. But you can’t stop there. If a credit card company can’t obtain a default judgment against you, they’ll next try to obtain summary judgment against you. That’s just as bad as a default judgment! You need to make sure you keep fighting the lawsuit in order to keep leverage over the credit company. Even better, you need to keep fighting so you can get to a trial and prove you don’t owe the debt! If you need more help on what to do after you file the answer, check out this blog post here.

Debtbrief Can Help You Prepare an Answer

Debtbrief has multiple forms – not just an answer – that can help you defend your debt collection lawsuit against your credit card company. Check out our package that includes 10 forms that you need to defend yourself against your credit card company. The answer form includes preset sections to admit or deny paragraphs, and lists many common affirmative defenses so you don’t have to research what they all are. You can purchase the forms here.

Have any questions about an answer? Leave us a comment below. And best of luck fighting your credit card company!