Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by 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: When you are responding to a debt collection lawsuit, time is definitely of the essence. Here is SoloSuit's guide to the rule of 'time is of the essence' and how it applies to debt cases.

The term 'time is of the essence' is often used in different contexts. Regardless of the setting, this phrase basically means that something must be done within a specified deadline. For example, in business law, this expression means that one party must complete a particular task within a specified deadline. Failure to meet this requirement could lead to penalties and other consequences.

In debt collection lingo, this phrase means something different. This article discusses how 'time is of the essence' can be applied in debt collection lingo.

What's the meaning of 'time is of the essence' in debt collection lingo??

When you owe a creditor a particular amount of money, they expect you to make payments as agreed. For example, most credit card companies require you to make monthly payments towards your debt account.

If you fail to make the required payment, the credit card company will contact you to notify you about the missed payment. There isn't so much to worry about at this stage—you may only be charged a late payment fee. However, if you fail to make the payment after a long period, the credit card company will most likely contact you again to follow up on the missed payment.

Suppose they fail to reach you during that period. In that case, they'll start sending you mails or emails to contact you about the late payment and possible repercussions. If they can't reach you after a while, usually 150 days, they'll sell the debt account to a debt collection company.

The first few days of following up on a delinquent debt are the most crucial. This is where the 'time is of the essence' theory applies.

'Time is of the Essence' theory influences debt collection efforts

When you skip a debt payment without notifying your creditor, it could signify that you're struggling financially. In some cases, it may be due to a genuine mistake—you probably got too busy and forgot to make the required payment. Creditors usually hope that you'll still be able to submit the payment, and that's why they offer a 'grace period', usually a few days, to accommodate such scenarios.

But if the grace period ends and you've still not made the required payment, the creditors will have a reason to be worried. According to a CNBC report, the average American has at least $90,000 in debt. So when you fail to make a payment before the end of the grace period, your creditors will begin to pursue the debt aggressively.

They know that the first few days after a missed payment are the most critical. This is because your other creditors may also be actively trying to recover what you owe them. In such a scenario, time is of the essence. Creditors want to make sure that you pay them what you owe, but they also know that if they don't step up their efforts to recover the balance, another creditor will.

When creditors begin to call you about the unpaid balance, and if you're unable to settle it, you'll most likely begin to consider other options such as debt consolidation. You may even be tempted to file for bankruptcy depending on your financial situation. This is usually your creditor's worst nightmare. They know that they cannot come after the debt anymore when you file for bankruptcy.

For these reasons, most creditors are always willing to negotiate a settlement. It's always advisable to be honest about your finances if presented with such an opportunity. Never accept a repayment plan you can't sustain. When you're honest about your financial situation, most creditors will be willing to work with a repayment plan that best suits your budget.

Life happens. And when it does, you may not be financially prepared to honor your financial obligations. For example, when you lose your job unexpectedly, you may not be able to pay your creditors on time. In that case, talk to them to create a payment plan.

However, it's important to note that creditors are not obliged to accept your payment plan. The outcome of the negotiation varies from one creditor to another. For example, some creditors could decide to freeze your debt account for a specific period, allowing you some time to fix your financial situation. But on the other hand, some creditors might decide to sell your debt account to debt collection agencies. When the collection agency fails to recover the debt, they'll most likely file a lawsuit against you.

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What to do if sued over a debt you supposedly owe

A debt collection lawsuit is the last thing you want to wake up to, especially if you're struggling financially. However, as mentioned before, this is one of the many ways creditors or debt collection agencies try to recover the amount you allegedly owe. If you've been sued, there's no need to panic. Here's all you need to do:

Do not ignore the lawsuit. Ignoring it makes the situation even more difficult for you. The court will most likely grant the plaintiff legal authority to pursue the debt through various means such as wage garnishment.

Instead, read and understand the Summons and Complaint letter sent to you. The Summons notifies you of the lawsuit filed against you. The Complaint contains a list of allegations the plaintiff has tabled against you.

Understandably, responding to a debt collection lawsuit isn't always the easiest thing to do. To begin with, you have a limited time to respond, usually 30 days on average. In addition, the process of responding varies from state to state. You'll need to research debt collection laws in your state, file complex paperwork, assert your affirmative defenses, etc.

SoloSuit offers the easiest way to respond to a debt collection lawsuit to avoid making costly mistakes that could further jeopardize your situation. This web application will help you draft a legally acceptable Answer document. An attorney will then review the document at a small fee and mail it to the court and the plaintiff.

Respond to a debt collection lawsuit

The first step to winning a debt collection lawsuit is to file a written Answer with the court before the deadline. You have up to 35 days to respond, depending on which state you live in. This means that time is definitely of the essence when dealing with a debt collection lawsuit, as missing the deadline can lead to a default judgment being entered against you. With a default judgment, the party suing you can garnish your wages or put liens on your property.

This is why it's important to respond to the lawsuit as quickly as possible. Time really is of the essence for you as a consumer.

Follow these three steps to respond to a debt collection lawsuit and increase your chances of winning the case:

Respond to each claim listed in the Complaint document.
Assert your affirmative defenses.
File the Answer with the court, and send a copy to the party suing you.

You can learn more about these three steps in this video:

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

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"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate