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Wilson Cole's Podcast From The Road

Nov 5, 2019

Lawsuits: Timelines, and What to Expect as Your Case Moves Through the Courts

This can be a very cringeworthy subject because of the many unknowns that come with lawsuits. It may seem difficult to know what to expect with a lawsuit but they all generally follow the same path; there are always some variations in the process based on state laws, attorneys, etc. but the life span of all lawsuits is generally the same.

With AER collections, we have found that 83% of the accounts will be collected in-house with our collection staff, and about 1 out of 5 cases we will not recommend for suit. If we do decide that you should file a lawsuit, there is a general process that follows. We will send out the information to an attorney or to our in-house staff, we invoice you for the court cost, and an attorney will have to make a demand or notice before the suit is filed. Usually, it takes seven to ten days for due diligence and sending out the first letter. Within the next 30 days, we will reach out to the attorney and hear if we need them to file for suit. Although, this all is contingent on the client paying the invoice for the lawsuit fees. In most states, an attorney cannot pay court costs on your behalf. It can be frustrating because a debtor will never give you a check to sue, but the court will give you money back at the end of the process.

Next comes the process of being served; the attorney files suit, the court will send someone to serve the debtor, and then they have around 30 days to respond. The clock starts running the moment a client is served; the next step is for the debtor to respond, generally, with, “we don’t owe because. . .”, then the attorneys will have around six months to gather evidence and prepare their case before it is brought to court. The act of serving someone should theoretically be easy, but there have been some crazy cases which have led to even crazier laws about how it should be done. Most states have a sheriff or process worker serve the debtor, but if they evade them then in Georgia people can be served via UPS. The minute it hits the front door then that clock begins. Other states have stricter rules; California is a hand-to-hand state where the notice has to physically touch the hand of the debtor to start the clock. We have all heard insane stories about sheriffs chasing debtors down the street or even using Las Vegas show girls for delivery; thankfully, in extreme cases the court can turn to the secretary of state for help.

Serving people can be the biggest slow down, as we clearly learned above, taking between 30 days to six months to properly serve a debtor, but once that is done the case hops on the conveyor belt of the justice system. Getting a judgement also depends on the state and its laws. There are multiple types of judgement: clerk default, judicial default, summary, standard, etc. Standard is just what it sounds like; the case goes to court, and the judge makes a decision based on the evidence presented by the attorneys. Default means that the debtor was served but never answered, and then it breaks in two types. Clerk default is when a clerk of the court says they never followed through with their part of the suit. You gathered all of the information and the judge decides that the lawsuit goes through. This is the easiest judgement to overturn because of our system’s belief in giving everyone a fair trial and day in court, but courts do not look favorably on people evading charges. A judicial default happens when the court decides that the suing attorney does not have firm evidence on what is owed.