Kentucky Bankruptcy Law

Counsel with Care

Answering a lawsuit on your own

Having a sheriff or constable hand you a summons and complaint (a lawsuit) is an awful feeling. If you have been served with a lawsuit, then you really should consult a lawyer about the particulars of the complaint. This post should not be a substitute for obtaining individualized legal advise. However, I also know that not everyone has access to legal representation. If you are being sued for non-payment of a debt, then you likely have a hard time finding the funds to retain counsel. So, I am offering a few pointers in filing an answer to a complaint in order to protect your interests.

First, though, I want to suggest you reach out to a modest means or pro bono legal clinic if you cannot obtain private counsel. In the Bluegrass area and Eastern Kentucky you can contact: Legal Aid of the Bluegrass, The Fayette County Bar Association, and AppalReD.

Again, this is not a substitute for legal advice:

In Kentucky, a state court lawsuit must be answered within twenty (20) days of being served with the complaint. If the 20th day falls on a weekend or holiday, you have until the next weekday to file your answer, though I always err on the side of filing it a day or two early. If your goal is to delay the lawsuit as long as possible while you pull things together for bankruptcy, then you will wait until the last day of your time before filing your answer (again, I shave a day off just for an abundance of caution). Filing an answer consists of delivering your original, signed answer to the clerk and mailing a copy to each lawyer (or unrepresented party) listed on the complaint you received by first class mail. You do not need to send it certified mail.

The answer consists of three parts. The first part is the “style” of the case. It is all the stuff on the heading of the complaint, except you do not have to list the addresses of the parties – just their names – and you call it an “Answer” rather than “Complaint”. The case number is the most important part because you want the clerk to file your answer in the right case.

The second part is where you either admit or deny the allegations in the complaint. This is where a bit of lawyer speak comes in: if do not know something for certain, but suspect it may be true, you can still deny it by saying “I cannot confirm or deny such and such allegation of the complaint, therefore I deny the same.” You must do this because anything you admit in your answer is not longer a controversy. So, if the lawsuit is filed by the original creditor that you borrowed money from, then you can admit that you owe them a debt, but still deny the exact amount they are claiming is owed. However, if the lawsuit is brought by a collection agency or a party claiming that the debt was assigned to them, you may suspect that to be true, but you really do not know for sure that it was assigned to them correctly. So, you can deny owing that party a debt altogether as well as the amount they claim is owed. You must sign this part of the answer, but do NOT sign for anyone else. If you and your spouse are being sued for the same debt, you each must sign the answer or risk being found to be practicing law without a license.

The third part must also be signed (so you will sign your answer twice). This part simply is a statement saying that you put a copy of your answer into the mail, US Post, first class postage, and then list each party or their lawyer and the address you mailed it to. Again, sign after this statement and make sure you actually do send a copy to that party or lawyer.

Filing the answer can either be hand delivery to the clerk or by mailing your answer in to the clerk. Either way, you also want to submit a cop of your answer along with the original so that the clerk can stamp it and hand the copy back to you. This is your proof of filing the answer just in case the clerks misplace the answer (they do have lots of cases to manage by the way). If you mail your answer in, send a self-addressed, stamped envelope along with the original and copy so the clerk can mail it back to you.

Filing an answer in a lawsuit simply prevents the plaintiff from a quick and easy default judgment against you. It forces them to produce proof to the court. They may do this by way of a Summary Judgment or it may end up being a hearing (especially if it is small claims court). Either way, it typically gains you extra time to either file bankruptcy or prepare a defense.

August 8, 2014 Posted by | Alternate Debt Relief, attorney fees, Bankruptcy, Chapter 13, Chapter 7, Planning, Pre-filing planning | , , , , , , , , , , , | Leave a comment

When a violation of the Consumer Protection Act lands you in debt

First, I want to give a shout-out to my law school compatriot and all ’round helpful attorney, Ben Carter, for his pointers in the consumer protection arena. I recently was approached by a young lady for help with a particular debt. Other than this one liability, she had no debt to speak of and so bankruptcy really would not be the most cost-effective way of dealing with the issue. Bankruptcy will definitely extinguish a debt that arose out of bad practices by the creditor, so if the particular debt is high enough or if there are several issues that could be wrapped up at one time, then bankruptcy would be a route to consider. But when the only issue is a liability that came about by unlawful practices of the creditor, then one can consider another line of attack – pursuing an action under the Kentucky Consumer Protection Act (KCPA).

In my client’s situation, she was approached by a home security company. I do not want to go into the details at the moment because this matter is still pending, but I will say the salesperson for the home security company engaged in some bait-and-switch tactics and made some representations that she relied upon that turned out to be false. She quickly decided to cancel the contract but, as a result of one of those misrepresentations and deceptive acts, she missed the window in which the company (actually it turned out there were two separate companies which made it even harder to know what was what) claimed they would have honored the cancellation. Further, they claimed the damages for stopping the contract were the exact same amount as it would cost for the home monitoring service over three years. I did some research online via the Google (if I call it “the Google” it just sounds more impressive don’t you think?). Apparently complaints of this nature against these two cohort companies is quite widespread.

Now, the really nice thing about pursuing a company for a violation of the KCPA is where suit can be brought. The ordinary rule of procedure in a civil lawsuit is that the suit must be brought where the defendant is located. However, if a person buys stuff or services mainly for personal use, and is subjected to “unfair, false or deceptive acts or practices” (KRS Sect. 367.170) then they can bring suit in their own county’s Circuit Court (KRS Sect 367.220). This is incredibly helpful when, as in this young lady’s situation, both companies are non-Kentucky based businesses. If she had to sue them on their home turf, the cost would be astronomical.

That same statute, KRS 367.220, goes on to make sure judges know that they can award attorney fees to the consumer if they prevail and they can even award punitive damages against the offender. However, to position oneself the best way possible to make either of those things happen, the consumer must document extensive efforts to settle the matter along the way.

Given the generous jurisdiction, venue, and damages provisions of the KCPA, one would think more suits would be brought. This is where the economics of fraud come into play. Businesses that engage in fraudulent practices typically do not go after huge amounts of money. I venture to say that, other than that deposed prince of Nigeria, nearly all businesses who are fraudulent seek to acquire well under $2,000.00 from the consumer. That means that someone seeking to redress the wrong through court could end up spending about as much on a lawyer as the debt itself. And, as with all litigation, there is no certainty of prevailing  nor of being awarded attorney fees. Attorneys rarely will pursue one of these cases without some assurance that their time will be compensated and so the “cost-benefit analysis” often favors the dishonorable business. And, there is a dearth of low-income or pro bono legal advocacy programs because our society does not wish to fund them.

There is one more avenue a consumer can take if they cannot find a lawyer. Although there is absolutely no guarantee it would right their own personal injury, they can report the matter to the Attorney General’s Office and that office may investigate the businesses practices. Even if they do investigate and pursue an action, they would not be representing you individually. Furthermore, they state several steps to take first on their website.

All this considered makes bankruptcy a more attractive option to get out from under a debt arising from fraudulent or unfair business practices. When bankruptcy does not make sense, though, it is good to know that other avenues are available.

December 16, 2013 Posted by | Alternate Debt Relief, attorney fees, Bankruptcy, Consumer Protection, Discharge | , , , , , , , , , | 2 Comments