Usually, it’s best to answer the suit. Also, if you have some money available, you might want to consider settling the debt. An attorney can also help you negotiate a settlement. Once a collector knows that a lawyer represents you, it’s usually more willing to settle, and less interested in trying to win in court.
Full Answer
Jan 21, 2015 · Attorneys work closely with debt collection companies, also offering legal consultative support during default amounts collection. The law allows a debt recovery attorney to perform in-house visits to the debtor’s property. Although they are authorised to seize property, negotiating a payment plan is the preferred option. They may encourage the debtor to …
Dec 10, 2020 · If you can’t afford to hire an attorney (or paying for a lawyer would cost more than the collector is seeking in the lawsuit), you can prepare an answer, file it, and represent yourself. You’ll have to do some legal research, raise all possible defenses, and learn about all the court rules; otherwise, you could lose the opportunity to defend your case.
Most debt collection cases don’t get to trial; they settle, or the collector gets a default or summary judgment. Most collectors win their cases by default, without ever having to go to court. If you do go to trial, you—or your attorney, if you hire one—will have to present your case according to specific rules of procedure and evidence. At the end of the trial, the judge (or jury, if applicable) will make a decision. The judge or jury’s decision is then entered in the court records as a judgment, and it becomes official. (To learn about how the collector can use a judgment against you, read Types of Debt and Debt Collection Practices .)
A debt collection lawsuit begins when the collection agency files a “complaint” (sometimes called a “petition”) in court. The complaint will explain why the collector is suing you and what it wants—usually, repayment of money you owe, plus interest, fees, and costs.
Generally, you’ll get around 20 to 30 days to file a written answer to the lawsuit with the court. You’ll have to respond to the allegations in the complaint and raise any defenses you have, like that the statute of limitations (the law that sets a time limit on the right to file a lawsuit) has expired, or counterclaims against the collector, such as violations of the Fair Debt Collection Practices Act.
“ Discovery ” refers to the formal procedures that parties in a lawsuit use to get information and documents from each other to prepare for trial or settle the case. If you don’t raise any defenses or counterclaims, the collector probably won’t engage in discovery. But if you have a good defense or file a counterclaim, you and the collector might want to participate in discovery.
If the collector files its lawsuit in small claims court, you'll probably first get notification about the suit. Then, the parties go to court for a trial in front of a magistrate or other judicial officer. Typically, a written answer is optional and rules of evidence are inapplicable.
If the judge grants the motion, the court will enter a judgment against you without a trial.
Even if you don’t have a lot of money available, it's a good idea to talk to a lawyer who can point out defenses or legal violations that you didn’t notice. Usually, it’s best to answer the suit. Also, if you have some money available, you might want to consider settling the debt.
Be sure to keep a copy of the letter. Once the collector receives your letter, they may not contact you about the debt again, unless they’re doing so to tell you that the collector or creditor is going to take a specific action to resolve the debt.
According to the Fair Debt Collection Practices Act, passed by Congress to protect consumers like you, a debt collection is a person or company that regularly collects debts owed to others, typically when those debts are past due.
The Fair Debt Collection Practices Act was passed by Congress in 1977 to protect consumers by making some debt collection activities illegal. Some of those practices and activities which are illegal are described below, but before we get to those, let’s go over the definitions we’ll be using.
If you owe a debt, you owe money to a creditor for anything that you owe for personal, not business or commercial purposes. If you ever fall behind in paying your creditor you may be contacted by a collector.
The written notice must include: Amount of the debt. Name of the creditor. Your right to dispute all or part of the debt, in writing, within 30 days of you receiving the notice.
You have the right to sue a collector in either a federal or state court within one year of the date the law was violated. If you win your case against the collector, you may recover damages. You may wish to contact an attorney to help you with this process.
Checking your own credit reports and scores does not affect your credit scores in any way.
Foremost, the Fair Debt Collection Practices Act (FDCPA) is a consumer protection amendment that places restrictions on debt collection efforts at the federal and state level. Along with several other agencies, the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) are agencies that enforce the FDCPA by watching how ...
Most agencies are “third-party” offices, meaning a creditor has hired the collection agency to recover past-due accounts. Third-party collectors are regulated by the FDCPA, which means they are obliged to follow the strict guidelines that prevent abusive, deceptive, or unfair debt collection practices. When a creditor uses their own “in-house” ...
Brian Eggert is a business development specialist and writer for IC System, one of the largest receivables management companies in the United States. With 18 years in the collection industry, Brian's experience includes operations, client service, proposal writing, blogging, content creation, and web development.
If you don’t respond, the court may issue a default judgment, which essentially gives the debt collector what they want. This can include: Even if you don’t believe the debt belongs to you or it’s time-barred — meaning it’s past the statute of limitations in your state — you’ll still want to prepare a response quickly.
A statement that the collection agency will verify the debt if you request more information or dispute the debt within 30 days. A statement that the collection agency is required to provide information about the original creditor if you request it within 30 days. In many cases, it’s unlikely that a debt collector will sue during those first 30 days.
The summons you receive should list a date by which you need to submit your response to the lawsuit. If you don’t respond, the court may issue a default judgment, which essentially gives the debt collector what they want. This can include: 1 Garnishing your wages 2 Seizing personal property 3 Putting liens on your property 4 Freezing or garnishing your bank accounts
The debt settlement process can lower your credit score. But if you’ve already missed several payments and defaulted on the original debt, your score may already be in poor shape, and settlement can give you the best result for your finances.
If debt settlement isn’t an option, make sure you’re ready and prepared for your court date. As previously mentioned, working with a debt attorney can maximize your chances of defending yourself and winning the case.
When a collection agency first contacts a person about a debt, they’re required to send a validation letter within five days of that contact. The notice contains the following information: The amount owed. The name of the creditor seeking payment.
An attorney can also help you understand and protect your rights, and they can employ defense tactics that come from years of experience working against debt collection agencies. A debt attorney can also help you decide whether to try to settle the debt out of court instead of going through the whole legal process.
Should I Pay Debt Collectors or Original Creditor? 1 A creditor may have an in-house collection division. In this case, you are still in debt to the original creditor and that is who gets paid. 2 Sometimes the creditor will hire a collection agency to chase the money for them. Ask the debt collector if they own the debt. If not, you still might be able to negotiate with the original creditor. 3 Often the last straw, the original creditor might sell the debt to a collection agency. In this case, the debt collector owns the debt, so any payment is made to the collection agency.
Ways to Remove Collections from Credit Report 1 Dispute the claim#N#Your first option is to dispute the claim. This only works if you don’t owe the debt, or the collection agency fails to verify the debt within 30 days. Sometimes the collection agency keeps a debt on your credit report past seven years. In this case, you can write them with proof of when delinquency started to have it removed. 2 Pay for a removal#N#Even if you pay the collection agency and settle the debt, the collection stays on your credit report for seven years. You can try to negotiate with the collection agency to have the collection removed. You would pay a fee to the collection agency and they would stop reporting your collection, just make sure you have the agreement in writing. 3 Goodwill Deletion#N#If the debt was acquired in an unfortunate circumstance and the debt has been paid, the last option is to ask the collection agency or creditor to take the collection off your credit report out of goodwill. Maybe you had a medical emergency or a situation out of your control. If you have good credit (other than the collection) and were a reliable with payments before and after the delinquency, there is a chance they will take the collection off your credit report. Although, the chances are much higher with the original creditor and extremely low with a collection agency.
If you doubt that you owe a debt, or that the amount owed is not accurate, your best recourse is to send a debt dispute letter to the collection agency asking that the debt be validated.
There are really three scenarios when a debt is unpaid and the consumer could be confused about who they are dealing with and who is getting paid. A creditor may have an in-house collection division. In this case, you are still in debt to the original creditor and that is who gets paid.
Problems between consumers and debt collection agencies have been around a long time. In 1978, Congress passed the Fair Debt Collection Practices Act (FDCPA) in an attempt to give consumers protection from abusive practices.
You can stop calls from collection agencies by sending a certified letter asking them to stop calling. Debt collectors must send you a written “validation notice” that states how much money you owe, the name of the creditor and how to proceed if you want to dispute the debt.
In addition to the “validation notice” that debt collectors must send, there is a “statute of limitations” on most debts. The statute of limitations varies from state-to-state, from as little as three years to as many as 15. Most states fall in the range of 4-to-6 years.