What happens when a debt collector sues you

What happens when a debt collector sues you

Facing a lawsuit from a debt collector can be an intimidating and overwhelming experience. In the complex world of debt collection, individuals often find themselves in situations where legal action is taken against them. Understanding what happens when a debt collector sues you is not only crucial for your financial well-being but also empowers you to navigate the legal process more effectively.

Debt collection lawsuits are legal actions initiated by creditors or third-party collection agencies to recover outstanding debts. In this article, we delve into the specific intricacies of what occurs when a debt collector sues you. From the initial stages of the lawsuit to potential outcomes and ways to respond, this comprehensive guide aims to shed light on the legal landscape surrounding debt-collection lawsuits. Knowledge is a powerful tool, and as you embark on understanding the implications of a debt collection lawsuit, you equip yourself with the information necessary to make informed decisions and protect your rights.

What happens if a debt collector sues you?

If a debt collector (also called a collecting agency) sues you, you should know what the process usually looks like. The exact timeline will vary from person to person, though. A debt consolidation scam can happen, so make sure you check the debt and the debt collection to make sure they are real. You get a call or letter from the debt collector telling you that they have taken over your bill. This often happens when a bill is 180 days past due. The debt collector has to send you a debt validation letter within five days of calling you. This letter must include how much you owe, the name of the creditor, and instructions on how to challenge the debt if you think it's not yours.

You can ask the debt collector for a proof letter if you don't believe you owe the money. They have 30 days from the date of the approval notice to send this letter.

You need to talk to the debt collector and make a plan for how to pay off the bill. If your debt is real, you may need to pay it off in full, make a payment plan, or negotiate the amount you owe.

This person can sue you if you don't pay back or settle the bill. After getting this, you will get a complaint and then a court order.

The next thing you need to do after getting the complaint is either send a "notice of appearance" or an "answer." Pay close attention to the due dates and make sure you follow the directions in the complaint and summons. You should also converse with a lawyer.

There will be a default judgment or court order against you if you don't pay the bill collector or show up to court. So, someone could take money out of your paycheck or put a lien on your property. It usually takes 20 days after the service of a case for a default judgment to happen.

Here are five key points about what happens when a debt collector sues you:

1. Legal Summons:

When a debt collector decides to pursue legal action, they typically file a lawsuit against the debtor. The first indication of this is the receipt of a legal summons. This document outlines the details of the lawsuit, including the amount owed, the creditor's claims, and instructions on how to respond.

2. Response Period:

Upon receiving the legal summons, the debtor has a specific period, usually 20 to 30 days, to respond. It is crucial to take timely action during this period. Failure to respond may result in a default judgment, where the court can rule in favor of the debt collector without the debtor's input.

3. Court Proceedings:

 If the debtor responds to the legal summons, the case proceeds to court. Both parties present their arguments, and evidence is considered. The court examines the validity of the debt and whether the debtor is legally obligated to repay. This stage involves legal proceedings, and it's advisable to seek legal counsel for guidance.

4. Possible Outcomes:

The court can render various outcomes based on the evidence presented. If the debt collector proves the legitimacy of the debt and the debtor's obligation to repay, a judgment may be issued. This judgment can lead to wage garnishment, asset seizure, or other methods to satisfy the debt. On the other hand, if the debtor successfully disputes the debt, the case may be dismissed.

5. Negotiation and Settlement:

Throughout the legal procedure, there may be possibilities for negotiation and compromise. Debtors and debt collectors can engage in discussions to reach a mutually agreeable resolution. Settlements may involve a lump-sum payment, a structured repayment plan, or a reduction in the total amount owed. Debtors need to consider their financial situation and seek legal advice when negotiating.

Understanding these key points is vital for anyone facing a debt collection lawsuit. Timely and informed actions can influence the outcome of the case and alleviate the financial burden associated with the debt.

What you should do if a debt collector sues you

Knowing what to do when a debt collector sues you could help you relax during this difficult time. You can accomplish any of these items:

Respond to the court case.

The most important thing you can do is answer the debt collection case after making sure the debt is real. A study by The Pew Charitable Trusts found that about 70% of these lawsuits end in a default judgment for the plaintiffs (creditors) because the defendant's consumers don't reply.

You should not ignore a lawsuit warning just because you hope the debt collector won't call again. Accomplishing so can put you into crisis.

If you don't pay your debts, the debt collectors will not drop their case. A debt collection defense lawyer will have a much harder time helping you if you miss the court dates.

Defend the case

When you don't pay your bill, the original creditor will often hire a third-party agency to collect it. Debt collection agencies sometimes need to be given correct information. If you believe the debt is not yours or goes to someone else, you can fight the lawsuit.

A bill collector can sue you. If you don't agree with any or all of the information in the lawsuit, you can file a response to the lawsuit in court. You will then be able to argue against what is in the case or ask the court to throw it out completely.

A debt collection attorney may be the best person to talk to about how to get a debt case thrown out. There are low-cost legal aid choices if you decide you need to hire an attorney, and most consumer law attorneys will give you a free consultation to talk about your options.

  • LawHelp.org can answer your questions.

  • The Legal Services Corporation can help you find a nearby lawyer.

  • Look through the American Bar Association's list of lawyers who work for free.

Place in for bankruptcy

You could also file for bankruptcy, but this will rely on your finances and the amount of debt you have.

Your debt collector won't be able to get money from you if you file for Chapter 7 bankruptcy. All of your eligible bills will be forgiven.

Chapter 13 bankruptcy: Depending on your case, you can talk to the debt collector about paying a lot less. People who owe money can't bother you or sue you after you pay the agreed-upon amount.

Find out how bankruptcy will hurt your credit before you make such a big decision. Getting help from a counselor, financial expert, or another qualified person will help you understand what bankruptcy is and how it can affect your future ability to borrow money.

What you SHOULD NOT do if the debt collector sues you

Now that you know what you can do if a debt collector sues you, let's look at what you shouldn't do.

Don't worry.

  • If a bill collector tells you that they are going to sue you, don't freak out. It's easier said than done. Do some research instead—you need to make sure you're not the target of a debt collection scam. Consider yourself a victim of a scam if:
  • The debt collector is too pushy and makes threats about the cops or immigration.
  • The bill collector calls you and tells you that you need to pay right away.
  • You can pay the bill collector with gift cards, money orders, or money transfers.
  • In real life, a process server brings you a court order in person.
  • It's important to stay calm and think about your choices, even if the debt is real.

Pay attention to the lawsuit to collect the bill.

Even though it might be tempting, ignoring your case for debt will not make it go away. In fact, it will make things worse. The judge will automatically side with the debt collector if you don't answer the case. This means the debt collector can:

Get the money by taking money out of your paychecks.

  • Put a lien on your home or business.
  • Put a hold on or garnish your bank account funds.
  • Do not take responsibility.

Anyone who talks to a debt collector can use what you say against you in court. If someone calls about your case, don't say sorry or explain yourself, even if you know you owe money. Instead, write down what the bill collector says and let them talk.

Keep your bank account private.

No matter what, keep details about your bank account private. If you give the debt collection your bank account information, they could start taking money out of it. Only share this information with yourself once you have answered the case and made other plans.

ALina Kelian
19th May 2018 Reply

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

Rlex Kelian
19th May 2018 Reply

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip commodo.

Roboto Alex
21th May 2018 Reply

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

Post Comment