This article is the fifth in an on-going series on the life of an account as it makes its way through the collection process at Collection Bureau Services, Inc. So far our series has examined: disclosure and validation requirements imposed on third-party collection agencies (such as CBS) under the Fair Debt Collection Practices Act (FDCPA), actions such as phone calls and letters in the first 30 days on accounts with valid addresses and phone numbers, “skip-tracing” or finding information about consumers, negotiations and payment plans and the beginning of the legal process.
As we last left our account, a lawsuit was filed and a process server personally served the defendant with the summons and complaint, fulfilling the due process requirements under Montana’s Constitution. The defendant consumer is now on notice. Once this occurs the onus shifts to the defendant. Often, the receipt of the court papers is enough incentive for the consumer and he or she will call CBS to pay the account or make arrangements. Absent that, there is a statutorily granted period of 20 or 21 days, depending on the court, exclusive of the date of service, for the defendant to file a written “answer” to the court. The content, or lack thereof, in the answer determines the next path the account will follow.
The answer, allows the defendant an opportunity to admit or deny the allegations in CBS’s complaint. This is also where the defendant sets forth his or her “affirmative defenses.” Assuming the allegations are that a debt is owed, a true answer is a specific, detailed assertion that the debt is not due. Some common reasons include; the debt has already been paid, the debt is owed by another entity, or that the defendant isn’t the correct party. In reality, many answers contain a description of the consumer’s current situation or a retelling of the situation that caused them to find themselves in the current predicament. Other times the defendant may not file an answer at all. These three general tracks lead to divergent responses from CBS on your account. Let’s discuss these, in order, from least to most complicate.
The first and most straightforward scenario is when the consumer doesn’t file an answer at all. There are various reasons for this; the consumer recognizes they owe the account, or they simply fail to respond. In any case, after the 20 or 21 day period has expired, if no answer has been filed, CBS will ask for a “default” judgment. The judgment itself is the goal in the lawsuit, as a means to an end of collecting your account.
The second situation is where the defendant files an answer, but the answer isn’t a true defense to the allegations. This is where the consumer explains their budget, or their marital state, or their current state of employment or lack thereof. While CBS is empathetic to these responses, they don’t form a defense to the allegations in the complaint, that the defendant owes you a sum certain. In these cases CBS attorneys file a pleading with the court detailing why the response is an explanation, but not a defense, to the claim. Generally, the court is sympathetic to this and will award CBS judgment.
A true answer entails an actual defense to the complaint and comprises our third and most complicated result. Here, CBS’ legal staff will prepare for trial. At trial, the Plaintiff (CBS) and Defendant (your customer) will appear before the judge and present their evidence. . You may be called to testify as to your services and lack of payment. Several hearings can occur before the trial. Obviously, this is an expensive, time-consuming endeavor. We will work at all stages of this process to resolve the matter short of trial.
However, if a trial does occur, be assured CBS employs 2 competent, experienced full-time attorneys to give your account the best opportunity for a favorable resolution. Ultimately if the judge rules in the defendant’s favor the case is dismissed and no monetary recovery occurs. If CBS prevails, a judgment is entered. As stated above, absent full payment, judgment is the end goal of a lawsuit. A judgment is a judicial determination the debt was valid and owed.
Next month: Enforcing the Judgment…