Surprise, you have been sued!  Most of you may never face this but it is just a matter of time before some of you may face a legal claim on installment contracts or mortgages.

There are things you can do to reduce your chances of a legal claim being filed in court and give you the greatest chance of a successful defense.  Some actions to take are: 

  1. Although most contracts you have to sign to buy something cannot be changed, you should at least read it (before, when it is a substantial investment) and after, when it is a smaller purchase.  If you have any uncertainty what it means, consult with an attorney for that limited purpose.  It is worth the certainty of understanding what the contract requires of you.
  2. Keep each installment contract or real estate purchase document and the deed of trust/mortgage documents that go with it in separate files.  These documents are critical to your attorney’s ability to defend you.
  3. Keep records of proof of payment. If you write a check, keep all bank statements, at least the page with the check on it, from day one.  Keep the last mortgage balance statement showing payments and balances due.
  4. If a problem arises, documentation of communications is critical.  To the extent you can communicate by letter or email and keep a copy of what you send and receive, do so.  Put it in the file you started when you purchased the item.
  5. If you must communicate by phone, take notes with date and time, who you spoke to and what the other party said.  If you can confirm your telephone conversation by email, do so.  The worst case is to have the position in court of “he says – she says”.
  6. When a few attempts have been made to resolve the issue, with no success, consult with an attorney.  Once a claim appears likely, doing nothing further may be creating a greater problem and greater liability.  An attorney helping you at an early stage may resolve the problem quickly.
  7. Remember, consulting an attorney early to help you not get into legal problems or when a problem looks unresolvable by you, will result in a smaller attorney fee than the substantial one you will face when you get sued.
  8. When you do consult with an attorney, a complete file of documents and communication, organized chronologically, will expedite the attorney’s review and his/her ability to assess your liability quickly.