You are being sued for an account that was closed over 5 years ago when you Went on disabilityand had disability insurance which should have paid it so What do you do?

Answer 1

There are a couple of issues involved here. You should likely have a lawyer to assist you. This in itself does not constitute nor is it intended to constitute legal advice, not is an attorney-client relationship created or intended.

First, all States have statutes of limitations, which provide that lawsuits based upon different theories of law must be commenced within a stated period of time, or else they will be time-barred. Therefore, the answer to your question will depend in part upon the State, whether the account was founded on a written instrument, and when you made the last payment. As to the latter, making a payment on an account is often held to keep the account "alive", thereby tolling the statute of limitations. You need to consult a lawyer in your jurisdiction for specific advice as to this.

As to the disability insurance issue, in general, disability insurance is meant to replace lost income when you cannot work due to a covered cause of loss. By and large, you are free to use the disability payments for anything you need to use them for.

However, there are forms of disability insurance that are sold and purchased for the express purpose of paying a stated debt in the event of your disability. These are often sold in connection with a major purchase that you plan to pay for over time. If this is what you have, it is important that you reported the disability to the insurer so that claims process can be triggered.

You should also send copies of the summons and complaint to the insurer so that, if there is coverage, it can be handled. Additionally, contact the person or entity (or its attorney if it has one) immediately and explain the situation, giving him/her all salient information. In the meantime, attend all hearings and follow all instructions pertaining to the lawsuit so that a default is not entered against you; it is in this area that a lawyer will be of particular help.