Sued By Your Bank? You’re Not Alone
Bank lawsuits hit you like a freight train when you least expect them. One day, you’re managing your finances; the next, you’re staring at legal papers that might as well be written in another language. The financial institution that once welcomed your business now treats you like an adversary. Their legal teams have unlimited resources and years of experience crushing individual defendants. You’re facing a system designed to favor the plaintiff, where one wrong move can cost you thousands or even your home.
But here’s what banks don’t want you to know: you have more power than they let on. Legal teams, such as McCarthy Law, level the playing field by bringing the same aggressive litigation support that banks use against their own customers. We turn their tactics around and fight back with the knowledge and determination that can change everything.
Why Banks File Lawsuits Against Their Customers
Banks sue their customers for one simple reason: money. When you fall behind on credit card payments, loan obligations, or mortgage payments, the financial institution shifts from customer service mode to collection mode. They’ve already written off your debt internally, but that doesn’t mean they’ve given up on collecting every penny.
Most bank lawsuits target credit card debt, unpaid personal loans, and overdraft fees that have spiraled out of control. The bank’s legal department files these cases in bulk, often hundreds at a time because the court system makes it profitable for them to do so. They know most people won’t fight back, so they win by default judgment.
The Real Cost of Bank Litigation
Bank litigation costs extend far beyond the original amount of the debt. When the financial institution takes you to court, they’re not just seeking the money you owe. They want interest that has been compounding for months or years, late fees, over-limit charges, and attorney fees.
The court process itself creates additional financial pressure. You might need to take time off work for hearings, travel to the courthouse multiple times, and potentially face wage garnishment if you lose. Your credit score takes a significant hit that can last for years, affecting your ability to get loans, rent apartments, or even find employment in some industries.
But the emotional cost might be the heaviest burden. Bank litigation creates stress that affects your sleep, your relationships, and your ability to focus on work or family. Many people describe feeling overwhelmed by the legal paperwork and intimidated by the formal court process.
Your Options When Responding to the Bank that Sued You:
- File an answer.
An answer is your chance to respond to the factual allegations and legal claims contained in the complaint. In addition, you may raise any affirmative defenses you may have in your answer. An affirmative defense, if successful, could limit or exclude your civil liability. Filing an answer that provides a good strategic defense is crucial. However, it is very difficult for a non-lawyer to do this well, and failing to do it well can forfeit your rights.
- File a motion to dismiss or demurrer.
There are a variety of reasons that you may file a motion to dismiss. For instance, if you were never served with the summons and complaint, you could file a motion to dismiss for Insufficiency of Service of Process. Filing a motion to dismiss a lawsuit may not, however, get rid of the lawsuit forever, but rather bide time until you must file an answer.
- Do nothing.
Keep in mind that if you do choose to do nothing, the bank’s attorneys will apply to the court for a default judgment, which could include you having to pay the attorneys’ fees and costs for the bank’s lawyers. Upon receiving a judgment, the bank can then garnish your wages and bank accounts, attach liens to property you may own, etc. In other words, you should absolutely not ignore a lawsuit.
Note that this list is not meant to be exhaustive or serve as specific legal advice and is only meant to give a general idea of some of your options when responding to a lawsuit. If you’ve been sued by a bank, your best course of action is to consult with an attorney who can evaluate your case and may even be able to help you settle the case out of court.
General Rules When Filing Documents at the Court:
- When you file your response, you’ll need to be prepared to pay a filing fee to the court clerk.
- Bring the original plus at least two copies of your documents; the court will keep the original.
- Some courts have local rules for filing. Ask the court clerk while you’re there if any special rules apply to your case. (Alternatively, most courts list their local rules on their websites.)
- Pay attention to the court’s hours: if you’re even a minute after the court closes, you will not be allowed to file, which can have serious consequences if it’s your last day to file before the deadline.
- Keep in mind that normal courtroom etiquette applies, so dress appropriately.
- Any time you file a document with the court, you’ll need to provide the plaintiff (bank) with a copy of the document. This is known as service of process.
Defenses Against Bank Lawsuits
Banks file lawsuits assuming you won’t fight back, but they’re not always prepared to prove their case in court. The financial institution must show they have the legal right to sue you, that you actually owe the money they claim, and that the amount is correct.
Many bank lawsuits involve purchased debt. Your original creditor sold your account to a debt buyer for pennies on the dollar. The debt buyer then attempts to collect the full amount but often lacks the original contract, detailed payment history, or proper documentation to prove ownership.
Statute of limitations defenses can be powerful tools. Each state sets time limits on how long creditors can sue for unpaid debts. If the bank waited too long to file its lawsuit, the court must dismiss the case. The time limit varies by state and debt type, typically ranging from three to six years.
Arbitration clauses in your original agreement might force the case out of court. Many credit card and loan agreements require disputes to be resolved through arbitration rather than litigation. This can be expensive for the bank and might lead them to dismiss the case.
The Importance of Filing a Timely Answer or Response
Once you’ve been served with a summons and complaint, you will have a certain number of days to craft your response. Typically, a lawsuit requires that the defendant (you) file a response with the court within 20 days from the date you were served with a summons and complaint. Depending on the state you’re in, it may be as long as 30 days to respond. But you should never assume you have that much time. In fact, you should consult with a lawyer immediately upon being served to protect your rights. Failing to respond to the complaint in a timely manner is equivalent to not appearing in court, which will result in a default judgment being entered against you. For this reason, you must pay close attention to the deadline listed on the summons for your response.
What Happens When You Win Against a Bank
Beating a bank in litigation is more common than most people realize. When you successfully defend against a bank lawsuit, the immediate result is that you don’t owe the money they were seeking. The case gets dismissed, and the bank cannot collect through wage garnishment or asset seizure.
Victory in bank litigation often comes through technical defenses. The financial institution may fail to prove ownership of the debt, provide insufficient documentation, or miss procedural deadlines. When this happens, the court dismisses the case with prejudice, meaning the bank cannot refile the same lawsuit.
Winning can also lead to counterclaims against the bank. If the financial institution violated debt collection laws, engaged in negligence, or caused you damages through their actions, you might be entitled to compensation. Some successful defendants recover attorney fees and damages that exceed the original debt amount.
Find Your Bank Litigation Lawyer at McCarthy Law
Litigation is a complex process that requires knowledge of court procedures, debt collection laws, and financial regulations. McCarthy Law has nationwide attorneys who fight for all your rights when banks try to take advantage of individual consumers. We’re happy to help you along the litigation process and can’t wait to lead you to a favorable outcome. Our legal team knows how to challenge bank lawsuits, protect your assets, and hold financial institutions accountable for their actions. Don’t let the bank’s legal team intimidate you into giving up before the fight even begins.