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Mark Cappel
UpdatedMar 22, 2023
I paid my original creditor, but the creditor's attorney has filed a lawsuit against me. Do I have anything to worry about?

I am being taking to court for defaulting two months on a second mortgage, but have paid the payment directly to the bank and they are current and they have accepted the payments and does not show it is in default, but the lawyer is still trying to go after me. The problem is the lender and lawyer are not communicating and the lender should not take my payments and I should of been directed to the lawyer to make the payment. Do I have anything to worry about?

It is imperative that you show evidence to the attorney who filed suit against you to show you are current in your payments to the original creditor. Do not assume that this situation will sort itself on its own. Murphy's Law applies here.

There are several reasons for you to clear up this matter before a judgment is filed against you. First, it is waste of everyone's time. Judges get especially cranky if the parties in dispute appear in his or her court and have already settled the matter. Second, if a judgment is filed against you in error, it may be very difficult to unwind and vacate the judgment. Third, a judgment will appear on your credit report.

As mentioned in some states, if a judgment is paid before it is recorded never becomes part of the judgment records and will therefore not appear on your credit report. Once a judgment is entered, you may be able to negotiate with the judgment creditor (the plaintiff) to file a motion to have the judgment expunged as part of the settlement agreement. These last two options are much more difficult and time consuming that simply settling with the plaintiff before the judgment is issued.

Discuss settlement options with the attorney who is threatening to file the lawsuit before a judgment is entered against you. A judgment will almost certainly damage your credit score, so if a judgment can be avoided through proving it is unnecessary, I would encourage you to consider that option.

To read more about credit and credit scoring, I encourage you to visit the of Credit Solutions and Resources page.

I hope this information helps you Find. Learn & Save.



Debt statistics

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2022 was $16.91 trillion. Student loan debt was $1.60 trillion and credit card debt was $0.99 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

The amount of debt and debt in collections vary by state. For example, in Colorado, 21% have any kind of debt in collections and the median debt in collections is $1682. Medical debt is common and 11% have that in collections. The median medical debt in collections is $693.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.

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