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How to Resolve an Arrow Financial Services Lawsuit

Chloe Meltzer | August 05, 2024

Chloe-Meltzer
Legal Expert
Chloe Meltzer, MA

Chloe Meltzer is an experienced content writer specializing in legal content creation. She holds a degree in English Literature from Arizona State University, complemented by a Master’s in Marketing from California Polytechnic State University-San Luis Obispo.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: To resolve a debt lawsuit against Arrow Financial Services, be sure to file a written Answer into the case to block a default judgment, then negotiate with the opposing attorney to resolve the case outside of course through debt settlement.

For anyone dealing with debt, it is not something to take lightly. Whether the bills are piling up or you are being sued for a specific debt, you may be contacted by Arrow Financial Services. In this case, you have rights, and you should know them.

Arrow Financial Corporation is a multi-bank holding company and debt collection agency with $3 billion in assets. It is based out of New York and has been accused of violating parts of the Fair Debt Collection Practices Act. The FDCPA protects you from debt collectors that use unfair, abusive, or deceptive treatment.

If you have received a summons for a debt lawsuit, do not panic. Millions of Americans suffer from debt in the United States and there are steps you can take to rectify the situation. In some cases, you may not even owe the debt, or you may have already paid it off. Regardless, you will need to respond to the lawsuit.

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Step 1: Respond to the lawsuit

The number one mistake that consumers make after being sued for debt is not responding to the notice of debt. This notice comes in the form of a letter as a summons. If you do owe the debt but cannot pay it, then you might throw the letter away. This is not what you want to do. Instead, you must respond.

If you fail to respond to the debt claim, then you are at risk of a default judgment. This is something that is obtained against you for not responding. This will allow Arrow Financial Services to take money directly from your bank account, or garnish your wages. This varies based on the state you are being sued in, but the debt collector may also be able to add in attorney's fees, court costs, or interest to the balance.

Once the collection agency or creditor files a lawsuit, it is then on record with the courts. This means you need to formally respond via a letter in certified mail. This is called an Answer. It is essential that you do not admit liability for the debt but instead force them to prove that you are responsible. Then you need to file your answer with the Clerk of Court, and send a certified stamped copy to Arrow Financial Services. Typically this needs to be done anywhere from 20 to 30 days from the date on the notice.

Step 2: Negotiate the debt

After you file an Answer to the lawsuit, shift your focus to settle the debt. Filing the Answer will block a default judgment so you can negotiate the debt settlement in the meantime. To negotiate, follow these expert tips from an attorney:

  • Be honest about your situation.
  • Tell Arrow Financial Services why you can't afford to pay.
  • Determine how much you can afford to pay off now, and make an offer.
  • Be ready to receive a counteroffer and go through several rounds of negotiations.
  • Only bring up bankruptcy if you really mean it.
  • Do all negotiating through the attorney in charge of the case.

To learn more about these tips and more, check out our interview with attorney John Skiba on how to settle debt:

Step 3: Challenge the legal right to sue

When you are being sued for debt the best way to respond to a debt lawsuit is to challenge the right to sue. This is because at this point, once the debt has reached the hands of Arrow Financial Services it will have passed through multiple other entities. Whoever owns the debt must show that they legally have the right to sue you. If they cannot do this, they cannot legally sue you for the debt.

If you do not respond you will not have the chance to settle the debt or ask for proof. If you do respond, then you can ask for the following proof:

  • Credit agreement signed by you
  • Chain of custody of all paperwork that shows the origination of the debt from the original creditor

Step 4: Push Back on Burden of Proof

When you get served for a debt the entity suing you will be required to prove that you are responsible for the debt, and also that they have the legal right to sue you. This will include showing you owe a specific amount. This can be done by showing the balance increased when you made purchases, or that it was increased by fees you agreed to originally. If they cannot do this, then you may be able to have the lawsuit dropped.

Use SoloSuit to respond to creditors and win in court.

Step 5: Examine the statute of limitations

The statutes of limitations are laws that state how long a creditor may sue you for debt. The rules that govern the statute will vary from state to state. In some states, the statute of limitations is three to six years, while in New York it is 20 years. It is important to note that the period of the statute will begin on the last day you made any type of activity on the account. Activity includes something as simple as making a payment or using a credit card attached to a debt account.

Step 6: File a countersuit

In some cases, a debt collector may have violated the Fair Debt Collection Practices Act (FDCPA). The FDCPA is a set of laws that debt collectors must adhere to. They essentially protect you from harassment, and debt collectors calling you at odd hours or mentioning your debt to your family and friends. If a debt collector violates the FDCPA then you may be able to file a countersuit and seek compensation for damages.

The Final Straw: Filing a Petition of Bankruptcy

When you owe a debt that you know you cannot pay back, the last resort is to file bankruptcy. Although this is not always the best option, if you are also dealing with other financial issues, then it may be a good option to help you get out of a hole. When you file for bankruptcy, all collection acts must cease. This can buy you some time, or get rid of your debt altogether.

Responding to a debt lawsuit is not always simple, and knowing your right will make it a lot easier. Whatever decision you make regarding your debt collection lawsuit, be aware that your financial accounts will follow you for the right of your life. Getting ahold of them now can greatly improve your chances of being out of debt in the future. Regardless of what you decide, be sure to respond to the debt lawsuit, and always force Arrow Financial Services to prove your debt.

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