Debt Collection Lawsuit Process
The single most effective form of debt collection for any
creditor or debt collector is the filing of a lawsuit. If a lawsuit
is filed against you and you do not properly respond, you may wind
up having a judgment against you. If there is a judgment against
you, the collector or creditor no longer has to make a deal with
you for debt settlement. In order to satisfy a judgment, a creditor
can garnish your wages, garnish or seize funds from a checking or
savings account, or place a lien on personal property. In addition,
an unpaid judgment continues to collect interest at a state
specified interest rate.
What do do if you are being sued
- Read the summons. A summons is an official notification from
the court that a lawsuit is pending against you. In order for there
to be any judgment against you, a summons must be properly served
on you according to the laws of your state. The summons will direct
you precisely what to do and how much time you have to do it. Don't
delay. Typically you do not have much time.
- Contact a lawyer - contact us to see if we can help you
defend yourself. Even if we cannot, we will strongly urge that you
contact an attorney within the county where the lawsuit is pending
for advice on how you can avoid a judgment
Lawyers are debt collectors
The lawyers who file those
lawsuits are debt collectors according to the law. That means they
must follow the Fair Debt Collection
Practices Act in every way. Thus, when confronted with a debt
collector that is also a lawyer, or when being sued by a lawyer for
a debt collection, here are some things that the lawyers
must do:
- Advise you at each and every communication that the
communication is coming from a debt collector, and any information
obtained will be used for the purpose of debt settlement.
- Send written correspondence to your home address within 5 days
of the first communication identifying who they are, who they are
collecting on behalf of, and the balance owed. In addition, the
correspondence must advise you that you have the right to dispute
the debt, and has 30 days to demand that the debt collector
validate the debt.
- If you seek the validation, then discontinue all attempts to
collect the debt until such time as the debt collector provides
verification.
- In the event of obtaining a post dated payment instrument,
provide you written notice of the intent to deposit the post dated
instrument.
The debt collection lawyers cannot
- Do anything that violates the Fair Debt Collection Practices Act.
- Use their position as an attorney to trick you. Look out for
the trap in the courthouse. Lawyers acting as debt collectors in
the courthouse sometimes will try to work out a deal with you
beforehand. Be aware of the following important points:
-
- They want a judgment against you more than anything. If they
have that, then they are protected if you do not pay them on time
or you fail in the payment plan you make. Make sure you read what
you are signing and ask questions if you don't
understand.
- You are entitled to your day in court too. Don't be fooled into
thinking that you are not allowed to go in front of the judge or
that you would be unwise to talk to the judge. Judges are there to
uphold the law. If you are not getting the answers to your
questions from the lawyer you are against, ask to be in front of
the judge.
- Don't sign anything without reading it. The lawyer may explain
that the paper you have to sign is for your "payment agreement" but
it might say only that. You may be signing a consent to have a
judgment against you.
- Wait for your case to be completed. Just because the lawyer
says that he or she will go in front of the judge and you don't
have to, does not make it a good idea. Wait it out and hear how
your case is disposed of. Make sure it matches what you were told
by any of the lawyers or collectors you spoke to about the
hearing.
- Lawyers, like debt collectors, are not allowed to make any
misrepresentations to you. If they have done so, contact our office for a free
consultation.