Debt Collection Judgments

If a debt collection lawsuit is ignored or improperly defended, it can result in a default judgment or judgment against you.

A judgment can lead to:

  • Wage GarnishmentsWage garnishments allow a creditor who has obtained a judgment to take your wages directly from your employer. Iowa law, especially the Iowa Consumer Credit Code, limits wage garnishments. It is also possible to get further limits set by Iowa courts due to economic hardship. Wage garnishments and the additional costs associated with them can be avoided by settlement of the lawsuit or judgment. Bankruptcy can also end wage garnishments. If you need assistance with a wage garnishment or if you would like to know your rights and options, please contact the Johnson Law Firm for a free consultation.
  • Bank Garnishments – Bank garnishments freeze funds in your bank account. Some funds are exempt and cannot legally be garnished such as Social Security or exempt wages. Exempt wages remain exempt even if deposited into a bank account. Funds that have been unlawfully garnished can be recovered by filing a Motion to Quash the garnishment. If you need assistance quashing a garnishment or you would like to know your rights and options, please contact the Johnson Law Firm.
  • Adverse Entry on Your Credit Report for 7 Years – An adverse entry on your credit report can cause problems in obtaining employment, an auto loan or home loan. To get a free copy of your credit report, go to our consumer resources page and follow the link to get your free credit report. If you have debt that needs to be resolved, contact us for a free consultation.

Most debt collection lawsuits against consumers result in needless judgments because the consumer:

  • Defaults by not Filing an Answer – This is the number one reason consumers end up with needless judgments against them. Most of the time there are defenses to creditors’ lawsuits. Even if there are no defenses, credit damaging judgments can be still be avoided or settlements can be had for less than the amount claimed in a lawsuit. Options become limited, however, the longer a consumer waits to obtain qualified legal assistance. If you have received a right to cure notice or a debt collection lawsuit from a debt collection attorney active in Iowa, please contact us to discuss your situation. For more information visit our Iowa Collection Law Firms page or some of our other pages related to debt collection.
  • Is Unaware of the Lawsuit (aka “Sewer Service”) – When a debt collector sues a consumer, the creditor is required by law to serve the lawsuit so the consumer is aware he/she is being sued. Unfortunately, this does not always happen. When an alleged debtor is sued without being legally notified, her constitutional right to due process has been violated. Often the first time a consumer hears of a lawsuit is when her wages or bank account is garnished. These judgments can frequently be set aside If you think you may be a victim of “sewer service” please contact the Johnson Law Firm for a free consultation.
  • Represents Himself – Many times a person who has been sued unsuccessfully attempts to represent himself without knowing the law, legal procedures or even the small claims process. Your chances of success are particularly dismal if you have been sued in a district court collection lawsuit (in Iowa, a collection lawsuit for more than five thousand dollars). Consumers with very good defenses to the collection lawsuit lose for no reason other than they do not understand district court proceedings. It is probably not a good idea to do your own surgery or extract your own teeth. It is likewise undesirable to try to defend your own district court collection lawsuit. Experienced debt collection attorneys know exactly how to take advantage of consumers representing themselves and they do not hesitate to do that. If you do not know how to deal with a request for admission, motion for summary judgment or do not know what a creditor needs to prove to prevail on an account stated legal theory, the outcome of your credit card defense is probably not going to be good. If you have been sued and there are words in that last sentence that you do not know what they mean, for the love of God please call the Johnson Law Firm.
  • Settles the Lawsuit but Still has a Judgment on Record – It is very common for a consumer to be negotiating with the debt collector or a debt collection attorney, settle the case and then find out a default judgment was taken against her anyway, the very result the consumer was trying to avoid by settling with the debt collector. Other times the consumer settles, only to find out it was not properly documented and the creditor pocketed the money and sent the account along to a debt buyer to continue collection. In most cases, a qualified collection defense attorney could have obtained a better deal even with the attorney’s fee and avoided the judgment or the botched settlement. If you would like to know your options, contact the Johnson Law Firm for a free consultation.
  • Loses a Motion for Summary Judgment Filed by the Debt Collector – Many District Court judges try to be lenient with pro se defendants and will accept most anything for an answer (even though pro se litigants are legally held to the same standard as those with attorneys). The answer will stop the default. However the consumer then loses a motion for summary judgment because of the defective answer and because the consumer botched responses to requests for admission, interrogatories or requests for production. Even if discovery is obtained, the consumer does not know how to properly respond to the motion for summary judgment and loses the case because proper affidavits are not filed. The result is no trial for the consumer and a judgment against the consumer for the full amount demanded. 
  • Employs a debt settlement company – Debt settlement companies target individuals initially victimized by credit card banks and exploding credit card debt. Consumers are persuaded to pay steep fees for debt reduction programs to negotiate settlement of credit card debts. Unfortunately, many times the debt settlement company picks off one or two easy credit card settlements, but then cannot complete the remaining promised settlements of more difficult accounts. Even though the consumer has been making payments to the debt settlement company, and continues to make payments, the consumer gets sued because her payments are not going to her creditors. When it comes time to defend the lawsuit, the debt settlement company is nowhere to be found and the consumer is on his/her own without a lawyer to defend the lawsuit. To ad insult to injury, the fees paid to the debt settlement company are far more than would have been required to hire a competent collection defense lawyer in the consumer’s home state. To learn more about debt settlement abuse, visit our Debt Settlement, Debt Consolidation, Credit Counseling page.

To best defend your rights as a consumer, you should contact a consumer credit attorney as early in the debt collection process as possible.