What To Do When You Receive a Notice of Claim for a Debt
Received a Notice of Claim for a Debt? Here’s Our Tips
A Notice of Claim is a document that informs you you’re being sued due to an unpaid debt.
Sometimes known as a Statement of Claim or Demand letter, it will usually arrive via registered mail or be hand delivered by a courier.
When people receive a Notice of Claim, their first response is usually one of panic.
If you’re unsure what to do next or you don’t know what the legal process involves, it’s understandable that you would feel anxious and overwhelmed.
However, dealing with a Notice of Claim is easier than you might think.
Ignoring a pending lawsuit isn’t an option, so take a look at these top tips for what to do when you receive a Notice of Claim:
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1. Check it’s genuine
A genuine Notice of Claim should be embossed with a seal from the court on it.
This might be the Supreme Court or the Provincial Superior Court or it could be a Provincial Small Claims Court.
As well as having your name listed on it, it should also have the name of the company or organisation that’s suing you.
Some creditors and collection agencies send letters which look strikingly similar to a Notice of Claim in an attempt to pressure you to clear your debts.
It’s important to determine whether or not an alleged Notice of Claim is genuine, so you know exactly how you need to respond.
2. Respond quickly
You usually have around 14 or 21 days to respond to a Notice of Claim, so pay attention to the time limits or deadlines stated on the document.
The Notice of Claim will be accompanied by a response form and you’ll need to fill this out as completely as possible.
If you’re unsure how to file your response, contact the court that issued the Notice and ask for advice.
If possible, it’s advisable to access legal advice at this point.
Whether you’re aware of the debt or you have no recollection of it, an experienced lawyer will be able to provide you with personalized advice that’s tailored to your situation.
If you can’t afford to consult a lawyer privately, you may be eligible for Legal Aid or you could access help from a number of legal and debt solutions charities.
3. Consider payment options
If you are able to resolve the situation after filing your response to the Notice of Claim, legal proceedings may be discontinued.
This means you and the company suing you will come to a voluntary agreement, rather than going to court to obtain a ruling.
However, don’t be tempted to enter into any agreement that’s suggested simply to avoid going to court.
It’s advisable to seek advice from a licensed insolvency trustee or debt counsellor before you make any agreements regarding repayments, particularly if you’re in a difficult financial situation.
4. Prepare to attend court
Once you’ve filed a response to Notice of Claim, a court date will be set.
This will enable you to explain your situation to the judge and the creditor or their legal representative.
By being honest about your financial situation, the judge will attempt to issue a ruling that is both fair and realistic.
When you attend court, it’s advisable to bring documents that prove your income and expenditure.
You may be asked to submit these prior to the court date itself, so start preparing your paperwork as early as you can.
By allowing the judge and the other party to see proof of your financial circumstances, a workable solution can be reached.
Taking Action after Receiving a Notice of Claim
Learning that someone intends to sue you can be stressful but there’s no need to feel daunted.
Now you know what to do when you receive a Notice of Claim for a debt, you’ll be well-prepared to deal with the proceedings.
It is important, however, that you respond to this type of correspondence.
If you don’t file a response to a Notice of Claim, the other party could get a default judgement.
When a default judgement is issued, your wages could be garnished, and these funds given directly to the other party.
As this will have a significant impact on your income and credit file, it’s essential to take action and respond to a Notice of Claim appropriately.
If you’ve received a Notice of Claim and you’re unsure what to do next, we can provide the help you need.
Talk to a trustee in confidence now on (877) 879-4770.