This post is the second in a series of post. In the first post, we discussed the debt buying business. If you have not yet read through that post, you might find it informative.
Regardless if it is the original company you owed, or one of the debt buyers discussed in the first post, eventually you might be sued on the debt. Following is a discussion of how these suits are often prosecuted against you.
The first indication you will have that you are being sued will likely be a sheriff or private process server knocking on the door with a “Summons”. In this document will be the name of the company who is suing you, the date set for the court hearing, and details on the basis for the suit. You may not even recognize the company who is suing you. That may be because the debt has been purchased by another company. Do not think it will not affect you.
When you examine the papers, you likely will see the phrase “sworn account”. A suit bought on sworn account is a common practice in the debt collection practice but what does it mean?
When a creditor sues claiming you owe money, they must provide proof to the court that it is actually you that owes money and the amount you owe. If they can prove this, and you can’t or don’t refute the evidence, the court will find in their favor and they will get a judgment against you. With this judgment they can garnish wages, seize bank accounts, etc.
How does a creditor prove their case? One way is for the creditor to provide a copy of the original document you signed obligating yourself on the debt, such as the original credit card application. With that and billing statements, the creditor can establish that you owe them money. For many creditor’s this is difficult or impossible to do as they no longer have the original application or billing statements. This is particularly true if the suit is prosecuted by a debt buyer.
In Tennessee, we have a law, found at Tennessee Code 24-5-107. This law allows creditors another option. They simply provide a sworn statement that says the creditor is owed money by you and if you do not deny their sworn statement, they are not required to provide any additional proof to obtain their judgment.
You have options should you be served with a suit on sworn account. First, you can show up in court and deny that you owe the company. You can also visit the clerk’s office and file a sworn denial. If you do either of these, the company suing you will be required to provide proof such as the promissory note and/or statements. If you are not sure you owe the debt you are being sued for, you should do this.
In a follow up post on statute of limitations defenses, we’ll discuss another common way to avoid the judgment.
Of course, you may recognize the debt, understand you owe the debt, and the creditor is entitled to their money. There are ways to deal with the judgment which we’ll discuss in subsequent post.
Depending on the amount of the suit, and your other debt, you might benefit from filing bankruptcy. At Nashville bankruptcy lawyers Long, Burnett, and Johnson, PLLC, we are happy to meet with you to evaluate your situation. There is no cost for an initial office consultation so call us today if you would like to learn of ways to deal with a suit on sworn account. You can set up an appointment by calling (615)386-0075.
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