Debt Collection A to Z: V is for Venue
Okay….things have now led to a lawsuit. Since the lawsuit has been filed one of the first questions should be where should the case be heard a/k/a where is venue proper. Venue is a subject covered by first-year law students in Civil Procedure courses across the United States so we do not have the time (or need) to tackle it in all of its variations and permutations. Simply put, a debtor (one who owes or allegedly owes a debt) typically is entitled to have the lawsuit filed in the judicial district in which she resides.
For cases filed in state court the lawsuit should be filed in the county in which the debtor resides. Click here to review the venue rules created by the North Carolina General Assembly for cases filed in state courts in North Carolina. Click here to determine in which county you are located.
With cases in federal court, a judicial district comprises multiple counties but the lawsuit should be filed in the judicial district (click here to see which federal judicial district you are in) in which the debtor resides. I use the term “should” because the federal law regarding lawsuits by debt collectors (at least under the Fair Debt Collection Practices Act) allows suit to be filed in the federal judicial district:
(A) in which such consumer signed the contract sued upon; or
Often in the case of debts or accounts that have some age the creditor or debt collector files the lawsuit in the county/judicial district in which the debtor resided at the time the debt was originated but the debtor has since relocated to a new city, town, state, or country. If the debtor wants to have the lawsuit moved to a venue consistent with his current location this must be addressed by a motion for change of venue at the outset of the case. Needless to say a debtor’s motion to change venue may be met with resistance by the debt collector.
Some loan agreements and other debt-related contracts contain choice of venue provisions (also called forum selection clauses) in which specify venue will be appropriate in the event of a legal action between the parties regarding the debt. For debts and consumer loan contracts executed in North Carolina, choice of venue provisions stipulating venue shall be outside of North Carolina are invalid and unenforceable. But if the lawsuit is filed outside of North Carolina pursuant to a forum selection clause with consent of all parties at the time that the dispute arises venue outside of North Carolina would be permissible.
As you can see this venue stuff can be detailed and confusing. When it comes to assessing venue and other issues relating to debt collection lawsuits the debtor is best advised to seek legal counsel as soon as possible. Too often I have been contacted by debtors who delayed in contacting me or other lawyers. As such rights have been waived, opportunities were lost, and certain arguments are no longer valid—none of this is good. If you find yourself being sued by a debt collector contact me or another lawyer right away for a consultation.