A Guide to Creditor Lawsuits

If a creditor files a lawsuit, hiring a lawyer depends on whether the creditor can successfully prove its case, the cost of defense, and whether the creditor can actually collect. Even if someone doesn’t hire legal counsel, civil litigation lawyers in Singapore can help clients evaluate creditors’ cases and personal circumstances to determine the appropriate course of action.

Options for Dealing With a Lawsuit

When creditors sue for debt collection purposes, debtors have three options:

  • Allow a default judgment

  • Defend the lawsuit without help

  • Hire a civil lawyer

Every case is different, and the right decision depends on a variety of factors as listed below.

Is the Debt Legitimate?

If the debt is real, hiring an attorney may be a further waste of money and time. If there’s no counterclaim or defense and the case is easily proven, it’s not likely to succeed. When a client loses they have to pay the judgment and their own lawyer’s fees, and they may be liable for the other party’s legal fees as well.

Is there a Defense?

If a client’s defense or counterclaim is valid, it may make sense to hire legal representation. Hiring an attorney can give clients the information they need to defend against creditors’ allegations, and it can make sense in the long term.

Possible Defenses

In these cases, defenses are reasons why a client is not liable for a debt, or a reason why the collection shouldn’t be allowed. Below are some of the most common creditor defenses.

  • The statute of limitations has run its course

  • The suit was filed in the wrong location

  • The creditor can’t prove the client owes the debt

What’s a Counterclaim?

Counterclaims are claims made against creditors. In most areas, the counterclaim must be related to the transaction cited in the creditor’s case. It’s important to note that counterclaims aren’t a defense to underlying debt, but a separate claim. If a client wins a counterclaim, they may get a judgment against the creditor or encourage them to withdraw the lawsuit.

If an individual or business is facing a creditor lawsuit, hiring a civil litigator may be the right decision. Call the firm or visit its website today for more information.