Here in Virginia, a lawsuit for money in General District Court is called a Warrant in Debt. This sounds a lot scarier than it is. It basically means someone, a person or a company, is claiming you owe them money.
The purpose is of the Warrant in Debt is to get a judgment. A judgment, on its most basic level, is a court order that says you owe them money. It is a legal document that gives them power. The reason people want to get a judgment is they can try more aggressive ways to collect, including garnishing wages or bank accounts. Before getting a judgement, most creditors can only call, send letters, report negative information to credit bureaus (certain creditors, such as IRS, state, federal student loans, etc. do not need a judgment to use other means to collect).
The Process of a Warrant in Debt
After a creditor files a Warrant in Debt in the court, you must be given notice. Most often defendants are served with the notice in two ways: personal service or posted service. With personal service, a sheriff or a process server, brings the notice directly to you or an adult resident at your home. The other way (and much more common way) you can be served is via posted service, when the notice is posted/taped to the front of your door. The creditor will also provide a mailed notice. The Warrant in Debt lays out the most basic information about the claim: the parties involved, addresses, lawyers, the amount of the debt, the reason for the claim, etc.. Additionally, the document will have a “Return Date” on the upper right corner of the document. This is the date and time that the court is setting a hearing about the debt.
If you do not show up at the Return Date, the court will enter a Default Judgment against you. A Default Judgment means no one appeared to defend against the lawsuit, and the court entered a judgment. You have every right to attend, but it is important to understand what factors the court will consider. Often, clients who get a Warrant in Debt want to go to court and explain to the judge that they just cannot afford to pay. The judge may sympathize with the situation, he or she is not there to determine whether you can pay, but to determine whether the debt is valid or not. The judge at the court date will ask if the debtor or defendants owes the money or disputes the debt. If you owe the money, then the court would enter a judgment.
Disputing the Debt
If you say you dispute the debt, a judge will set a trial date to allow the plaintiff and defendant a chance to prove their case. At trial, the creditor will present evidence and try to prove the debt is valid. After the creditor presents its evidence, the court will allow the defendant to present any evidence to show why the debt is not valid or owed. Common defenses are things such as, statute of limitation, previous payments not accounted for, amounts are incorrect, mistaken identity, etc. The court cannot consider arguments about inability to pay. After both sides present evidence, the court will then make a legal determination.
What Happens After a Judgment?
If you fight the debt and win, then there is nothing else to worry about unless the creditor appeals. If you lose or you allow a judgment to be entered, the creditor can attempt to collect. Since a judgment is valid for at least 10 years (can be valid up to 40 years in Virginia), creditors may wait to collect. However, some creditors will immediately start using their rights. Creditors can collect via garnishment of paychecks, garnishment of bank accounts, a lien on property, etc.
After a judgment is entered, creditors are often more difficult to deal with since they have many more rights. Stopping a garnishment is very difficult in Virginia; usually, the only option is bankruptcy. As a result, many individuals are forced to file bankruptcy after being garnished. This is why we highly recommend settling or negotiating with a creditor before a judgment is entered because you are more likely to succeed.
Attorney Ashley F. Morgan is a Virginia licensed attorney. She has been helping clients deal with debts and Warrants in Debt for most of her career. She helps clients settle or negotiate debts, along with defending against certain lawsuits, and discharging debts through bankruptcy.