An alternative lender in NY filed a lawsuit against me - can I answer the lawsuit myself?
- Thomas Tramaglini
- Jun 4
- 5 min read
One of the most common inquiries our firm receives from small business owners is whether they need an attorney to respond to their lawsuit and what the consequences are if they decide not to respond. Having a skilled attorney answer your lawsuit is not only crucial, but for NY lawsuits against businesses, it is mandatory. Additionally, the attorneys representing alternative lenders prefer that you attempt to respond to your lawsuit on your own or not respond at all. By yielding to the attorneys of predatory lenders, you endanger your business and future. This article offers insight into why legal assistance is necessary when facing a lawsuit.
By Thomas Tramaglini, Chief Operations Officer
Were you sued by an alternative lender?
If you were sued by an alternative lender it is not the end of the world. However, you can have massive issues if you do not protect yourself.
If your lawsuit was filed in New York and your business is not established in New York resident, you have 30 days to answer your lawsuit (20 for NY residents). In fact, most states have similar laws to New York.
Is it expensive to hire an attorney?
Depending on the case, amount of debt you have, the number of creditors suing you, and other factors it can cost thousands to tens of thousands of dollars to retain an attorney to defend you.
However, the Beacon team has a team of attorneys who are proficient in alternative lending law and because we work in volume, our costs are well below what other law firms might charge. Further, our firm knows the industry better than the everyday attorney in New York and we will match you and your business to an attorney who best fits your situation.
What does answering a lawsuit do for those who are sued?
Prevents immediate judgements.
Tells the plaintiff that you are not going to just lay down and you want to work out your dispute.
You can also assert counter-claims.
Your lawyer can present affirmative defenses that can nullify the plaintiff's claim, even if the allegations are accurate. For instance, you could contend that the debt has been settled, the statute of limitations has expired, or you were a victim of identity theft.
Develop a strategy to defend yourself against the alternative lender.
Can I answer my lawsuit by myself (Pro Se)?
With several do it yourself tools such as Solo Suit (https://www.solosuit.com/) out there, we consistently see small business owners trying to defend themselves.
As you can see below, the NY Law is quite specific - small business owners need an attorney to answer their lawsuit. The law in New York requires that if a corporate entity is being sued the entity needs an attorney to answer the lawsuit.
Pursuant to CPLR §321(a) and applicable case law, a limited liability company is required to appear by counsel
Section 321 - Attorneys
(a) Appearance in person or by attorney. A party, other than one specified in section 1201 of this chapter, may prosecute or defend a civil action in person or by attorney, except that a corporation or voluntary association shall appear by attorney, except as otherwise provided in sections 1809 and 1809-A of the New York city civil court act, sections 1809 and 1809-A of the uniform district court act and sections 1809 and 1809-A of the uniform city court act, and except as otherwise provided in section 501 and section 1809 of the uniform justice court act. If a party appears by attorney such party may not act in person in the action except by consent of the court.
(b) Change or withdrawal of attorney.1. Unless the party is a person specified in section 1201, an attorney of record may be changed by filing with the clerk a consent to the change signed by the retiring attorney and signed and acknowledged by the party. Notice of such change of attorney shall be given to the attorneys for all parties in the action or, if a party appears without an attorney, to the party.2. An attorney of record may withdraw or be changed by order of the court in which the action is pending, upon motion on such notice to the client of the withdrawing attorney, to the attorneys of all other parties in the action or, if a party appears without an attorney, to the party, and to any other person, as the court may direct.
(c) Death, removal or disability of attorney. If an attorney dies, becomes physically or mentally incapacitated, or is removed, suspended or otherwise becomes disabled at any time before judgment, no further proceeding shall be taken in the action against the party for whom he appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon that party either personally or in such manner as the court directs.
(d) Limited scope appearance.1. An attorney may appear on behalf of a party in a civil action or proceeding for limited purposes. Whenever an attorney appears for limited purposes, a notice of limited scope appearance shall be filed in addition to any self-represented appearance that the party may have already filed with the court. The notice of limited scope appearance shall be signed by the attorney entering the limited scope appearance and shall define the purposes for which the attorney is appearing. Upon such filing, and unless otherwise directed by the court, the attorney shall be entitled to appear for the defined purposes.2. Unless otherwise directed by the court upon a finding of extraordinary circumstances and for good cause shown, upon completion of the purposes for which the attorney has filed a limited scope appearance, the attorney shall file a notice of completion of limited scope appearance which shall constitute the attorney's withdrawal from the action or proceeding.
N.Y. CPLR 321
Amended by New York Laws 2022 , ch. 710, Sec. 1, eff. 12/16/2022.
Contact Beacon Client Solutions to better understand your situation and how we can help you.
Dr. Thomas Tramaglini is the Director of Operations and Negotiation for Beacon Client Solutions, a company that supports small businesses on a host of fronts, especially MCA debt. Thomas has been a small business owner for many years, as well as held leadership positions in several organizations and companies. Thomas holds a B.A. in History, as well as Masters and Doctorates in Organizational Leadership from Rutgers University, The State University of New Jersey.
Disclaimer: Beacon Client Solutions is not an accountancy, or a law firm. We are business consultants. While Beacon works with outstanding attorneys and accountants, we cannot and do not provide legal or tax advice. All of our work is connected to those who are legally certified to give such advice. Beacon does have a longstanding body of work in MCA resolution and understands what small business owners deal with, specific to MCA. Beacon Client Solutions serves clients in all 50 states, Puerto Rico, Mexico and Canada.
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