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Receiving a Summons from a Debt Collector – How Should You Respond?

October 26, 2019 | admin

Whether a business falls behind due to cash flow problems or unexpected legal trouble, debt can pile up quickly in tight situations.

Dealing with debt collectors is stressful enough for most companies.

Receiving a court summons from a debt collector is the last thing a business wants after dealing with their financial problems.

A court summons can be frightening – most companies, especially small businesses and sole proprietors, don’t know what to do with one when they receive it.

This blog highlights what a court summons is, some frequently asked questions about court summons, and how to avoid getting one in the first place.

What Is a Court Summons from a Debt Collector?

Used in civil or criminal cases, a court summons indicates that someone is required to appear in court. This is the start of a legal case. Some people may be familiar with a summons for jury duty – this is similar, except the summons is to defend against debt collection activities.

While a summons for jury duty may be delivered by mail, a court summons for something serious will be delivered in person either by a local sheriff or someone appointed by the court. Typically, it will require a signature.

How Does a Court Summons Work?

First, it’s important to know what to expect in a court summons. A court summons for debt collectors will include:

  • Name and jurisdiction of the issuing court
  • Name of the registered agent or officer of the company
  • Case number assigned by the court
  • Name of the plaintiff and defendant
  • Description of the debt owed
  • Date by which the defendant must reply to the court summons
  • How the defendant must respond to the court summons

If a business is a sole proprietorship, the court summons will be delivered to the owner. In the case of a limited liability company (LLC) or a corporation, the court summons will be delivered to the registered agent or an officer of the business.

What to Do After Receiving a Court Summons

The first thing a business will want to do after receiving a court summons is to figure out how they are going to respond. If a business has a large amount of debt and is considering bankruptcy or other legal remedies, it would be wise for them to hire an attorney to respond to the court summons.

For cash flow problems that can resolve themselves over time, a business may be able to avoid the cost of an attorney and respond on their own. It is very important to pay attention to all critical information in a court summons if a business is going to take this route.

How to Answer a Court Summons for a Debt Collector

As soon as a business or registered agent receives a court summons, it’s a good idea to note the date by which they need to reply. It is critical to respond by this date to avoid losing the case by default. The court summons will include information on how to reply – either by mail, phone, or possibly online,

If for some reason a business is unable to make the hearing for the scheduled date, an extension may be possible. However, it’s important to contact the court as soon as possible to have this rearranged. If using an attorney, notify them as soon as possible to avoid any delays in responding to the summons.

Frequently Asked Questions

Court summons from debt collectors can be overwhelming, and not knowing what to do with one is intimidating, to say the least. Read through these frequently asked questions for answers to the complex questions people ask about court summons.

How Can a Business Find Out if They Have a Court Summons?

Because of the nature of civil lawsuits and small claims courts, most court summonses are delivered in person by the local sheriff or a court-appointed representative.

If a business is concerned there may be a court summons for them, the only way to find out is to contact the court. A few counties may offer online search services, but they are few and far between.

What Happens if a Business is Summoned and They Don’t Go?

A court summons for a debt collector is a serious issue that a business shouldn’t ignore. Not showing up as expected may result in a business giving up its right to contest the case. This effectively means a business loses by not showing up to court when they are scheduled to.

If for some reason a business is unable to show up on the date scheduled, it is important to contact the court as soon as possible to see about rescheduling. Otherwise, the business may be obligated to pay the full debt regardless of the situation.

How Often do Debt Collectors Take Businesses to Court?

This varies greatly depending on the size of the business to which another business owes money, how much money is owed, and the state of the company at the time of the debt collection activities.

Typically, a debt collector will sue one time and either win, lose, or offer a settlement opportunity to the business in debt. If the debt collector loses, they cannot sue again.

Can a Business Defend Themselves in Court Against a Debt Collector?

Yes, a business may represent themselves in court against a debt collector. And while this saves a lot of money, it should be done with caution and diligence. An attorney may be able to negotiate lower settlements on debt.

If a business is thinking about representing themselves in a debt collection case, it is important to research relevant cases and judgments to see how best to proceed with the case.

Do Debt Collectors Send Fake Court Summons?

While this is not a common practice, it can happen. The best way to know if a court summons is real is to answer these questions:

  • Was the court summons delivered by a sheriff, or was it sent to a business address?
  • Is there verifiable contact information on the court summons?
  • Can the sending court verify the summons over the phone or in-person?

Answering these three questions can help prevent any unnecessary stress over a fake court summons.

What Does a Debt Collector Have to Prove in Court?

If a business decides to defend themselves in court – or hire an attorney to defend them – there is still work to be done before a debt collector gets paid. Some information must be verified, documents may need to be provided, and both sides may have arguments to make about the supplied information.

Information that needs to be verified by the debt collector before winning a case includes:

  • Verification of the owner of the debt – ask for documentation that proves a business owes the money if it doesn’t seem legitimate.
  • Verification that the debt hasn’t been paid already – review all payments to ensure that the debt hasn’t been satisfied and is still valid.
  • Verification that the debt actually exists – old debts with no documentation may “resurface” so it’s important to make the debt collector prove the debt is real.

Having this information verified prevents a business from paying a debt they do not owe, and it can save a business a lot of time, energy, and money by eliminating the need for a costly attorney or court case.

Court Summons from Debt Collectors: How to Prevent Them

The easiest way to deal with a court summons from a debt collector is to avoid one in the first place. A few things can be done to help prevent a business from receiving a court summons. The first is to maintain open communication with the debt collector.

The second is to verify the legitimacy of the debt. A debt collector will typically contact a business before sending a court summons, so take that opportunity to get all of the information possible about the potential debt and then verify against business records.

Finally, open up disputes for any debts that do not seem valid, whether the company information doesn’t match, the amounts don’t match, or the dates don’t add up. This will help prevent unnecessary court summons.