A common question I get from clients at the Debt Line Law Office, is, “What should I do about that Petition I was just served with from a creditor.” Below is the general outline of the advice I give.
The Summons will tell you the time that you have to file an Answer or other responsive pleading. If the papers served with the Petition instead tell you to appear in court at a certain date and time, your matter is likely in small claims courts and the information below will be largely inapplicable to you. Call me at (918) 878-0010 for small claims advice.
If you file nothing, after the amount of time listed in the Summons passes, the creditor can file for a default judgment, which will likely be granted. The creditor will ask that its attorney fees and costs be added to the judgment. Then that judgment can be used to obtain garnishments, levy bank accounts, and put liens on real property, if the creditor knows where you work, where you bank, or what real estate you own. If the creditor does not know this information, the creditor can then request an asset hearing. You should be served with notice of this hearing and if you fail to appear, a bench warrant can be issued to compel your appearance. At the asset hearing, the creditor will ask questions about money and assets that you have, as well as information needed to obtain garnishments, et cetera. The Judge at the asset hearing will require you to truthfully answer these questions and may set a review date to come back on the same docket. This basically continues with the creditor trying to garnish, levy, and lien all the money it can from you until the judgment is paid or expires. In Oklahoma a judgment can expire if it is not renewed after five (5) years.
If you file an Answer, it should indicate whether you admit or deny the allegations in each paragraph of the Petition. Under Oklahoma law, filing an Answer waives certain defenses. So, if you wish to file a Motion to Dismiss on the basis of (1) lack of personal jurisdiction, (2) improper venue, (3) lack of capacity to be sued, or (4) failure to state a claim upon which relief can be granted, you must file your Motion to Dismiss prior to filing an Answer. Assuming you file an Answer and deny at least one important element to the creditors case, the creditor will not be able to simply get a judgment and it will delay the case.
The creditor’s next move will likely be to file a Motion for Summary Judgment, which will include attachments to evidence the debt owed. By Oklahoma law you have fifteen (15) days to respond to a Motion for Summary Judgment. If you do not file a response the Judge will likely grant summary judgment without a hearing. If you do file a response the Judge will either review both the Motion and response and decide whether to grant summary judgment or set the matter for a hearing on the Motion for Summary Judgment. Assuming your creditor attached contracts and documents and things to its Motion for Summary Judgment which tends to show that you owe the money, Summary Judgment will likely be granted unless you present evidence contradicting this. A signed affidavit can be appropriate evidence for the purpose of a summary judgment hearing. For example, if you filed a signed affidavit stating that the signature on the contract filed by the creditors is not yours, this would likely prevent summary judgment from being granted because there is a “genuine issue of material fact.” That is, a fact finder must decide whether that is your signature or not and therefore summary judgment is not appropriate. Keep in mind, that testifying to a lie or lying in an affidavit is perjury, which is a felony in Oklahoma punishable with up to five (5) years imprisonment.
If summary judgment is granted, the creditor will request that its attorney fees and costs be added to the judgment and as you can imagine those costs may have increased substantially from what they were at the stage when your Answer was filed. vThe Summary Judgment can be enforced by the creditor the same way that it was noted above that a Default Judgment would likely be enforced.
If summary judgment is denied, your case will likely move forward to trial so that the judge or a jury can decide each issue of material fact. If the amount in controversy is more than $1,500.00, either you or the creditor can demand (and pay for) a jury trial. Otherwise, a bench trial, where the judge makes the determination, will be had.
So now we are back to the common questions: “How should I respond to this lawsuit I was just served with.” Bottom line, if you have defenses to the debt, your decision will be based on the quality of those defenses and you will need to consult with an attorney who can evaluate your specific circumstances. If you have no defenses you wish to present, there are two mutually exclusive goals, to choose from. You can go the route of maximize the amount of time it takes for the creditor to obtain the judgment or you can try to minimize the amount of the judgment or you can try to .
If you are planning on filing bankruptcy in five (5) months and are served with a lawsuit from a credit card debt that will be 100% discharged in your chapter 7 bankruptcy, it really does not matter to you whether the judgment being discharged goes from $50,000 to $75,000. However, it would probably matter greatly if you received a garnishment for 25% of your pay next month because that would make it difficult to raise the attorney fees you need for your bankruptcy attorney. Under this scenario you probably want to maximize the amount of time it takes for the creditor to receive the judgment. So, you would file an Answer and contest a Motion for Summary Judgment. Most of the time this can buy you a least a few months.
If you do not qualify for chapter 7 bankruptcy or do not wish to file, it probably makes sense to minimize the amount of the judgment. In which case, the more you fight the case, you more you add to the creditors attorneys fees, costs, and interest that typically end up being tacked onto the judgment. So, consider contacting the creditor to see if they would agree to reduce the debt a bit in exchange for you agreeing to enter a judgment by agreement with a payment plan. If no progress is made with the creditor, you will probably want to file an Answer that admits everything. Or, simply file nothing and allow a default judgment to occur.
All this said, each person’s circumstances are different and one article cannot cover every variable. So, if you are in the position of deciding whether to respond and how to respond to a lawsuit, speak with an Oklahoma Bankruptcy Lawyer at the Debt Line Law Office by calling (918) 878-0010.