Can a Debt Collector Sue Me if I'm Making Payments

A letter of the alphabet arrives from a law function threatening a lawsuit for payment on an old nib. It's upsetting, only hardly rare.

Yous may get hit with a debt collection lawsuit if you have sometime, unpaid medical, credit card or other consumer debt. If you don't respond in fourth dimension or attend the court hearing, the creditor is likely to win — and may get the right to take part of yourwages or banking concern account.

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In this article:

What happens when you lot get sued for debt

Lawsuits are a common and efficient debt collection tactic. In New Jersey, for example, debt collection lawsuits accounted for 48% of civil judgments in 2011, according to a ProPublica report . I chaser at a debt collection business firm filed 69,000 lawsuits in a unmarried year, information technology plant.

A debt collection lawsuit begins when a creditor files a complaint with a state ceremonious courtroom list you lot equally a defendant, along with your co-signer if you have one. The complaint volition say why the creditor is suing you and what it wants. Typically, that's the money y'all owe plus interest, and perchance attorney fees and court costs.

The creditor, collection agency or attorney representing information technology will then notify you of the lawsuit by "serving" you, which means delivering a copy of the complaint and a court summons. The summons has information about when and how yous can file a formal response in courtroom, and the date of your court hearing.

Debt collectors bet that most people won't attend their hearing, leaving the judge to file a default judgment. With a default judgment the creditor may exist able to:

• Place a lien against your property.

• Attempt to freeze part or all of the money in your bank account.

That's why you demand to respond to the complaint and summons. Here'south what to practice.

Gather information

The creditor suing you is unlikely to be your original creditor. The debt may take been sold, perhaps several times over. It may be something you recognize, or it may be an quondam bill long forgotten — now a zombie debt — that a debt collector has revived.

Review your own records and whatsoever data yous got in the mail, including the validation letter that the debt collectors must send. Make up one's mind:

• Who the creditor is, whether the amount is accurate and whether you really owe the debt. Errors creep in as debt is sold and resold; names and amounts can be incorrect.

• Whether the debt is by the statute of limitations . Once that passes, the debt is considered "fourth dimension-barred." That means you lot tin't legally be sued — but collectors may all the same try it, in violation of your consumer rights . Your obligation to pay time-barred debt remains, however, and the unpaid debt will continue to hurt your credit.

Don't delay. You generally have 20 to xxx days from when you get served to file a response.

Respond to the lawsuit

"The worst thing anyone can do is ignore the lawsuit," says Ira Rheingold, executive director of the National Association of Consumer Advocates. That puts your wages, bank account or holding at risk. Worse, you tin can also lose the ability to dispute that you lot owe the debt.

Organizing your defence force and writing the response tin be complicated, then you may want to consult an attorney. Often, attorneys will provide a gratuitous consultation, and if you win your case the debt collector likely will take to pay your legal fees. Many local legal aid offices offering depression- or no-cost services. Military service members tin can get aid from their local judge advocate general office.

An attorney can:

• Bespeak out defenses you weren't aware of.

• Assist you write your formal response.

• Stand for you in court, if necessary.

Guidance from an chaser can assist yous write a more complete response, which might make the creditor more than probable to pursue a deal with y'all. If you go a step further and nourish the hearing with an attorney, Rheingold says, the collector "likely won't be able to verify the debt and it might go dismissed."

You lot probably will accept to pay a fee to file your response. Inquire the courtroom clerk for information well-nigh fee waivers if you tin can't afford the fee.

Options for handling the hearing

Showing up for your hearing is crucial. This is when the estimate will decide whether you take to pay, and information technology's your chance to make your defense or work out a deal with the creditor.

How you handle it depends on whether you owe the debt.

If you owe the debt

You have a few options. Seek out the creditor earlier the hearing begins and see if you can agree to:

• Set up a payment program where you brand regular, affordable payments on the pecker until you pay it off.

• Settle the debt for less than y'all originally owed. If you tin can strike a deal, exist sure to get a written understanding that says the creditor will consider the debt fully settled and will study it to the credit bureaus as paid.

Credit counseling from a nonprofit credit counseling bureau tin assist you rummage through your finances to encompass a payment program or settlement. If y'all still can't afford to pay the corporeality you owe, yous may want to pursue a debt relief option , such every bit bankruptcy , for a fresh start.

if you incurred the debt, but call back you shouldn't have to pay

In that location are several instances in which y'all might have standing to refuse to pay a debt. You may be able to invoke these then-called affirmative defenses if, for example:

• What you bought was defective or never delivered.

• The debt contract was unenforceable or illegal, or you signed it based on falsehoods.

• You lot canceled the contract within the lawful time frame.

These are just a few of the possible affirmative defenses. If you call back you might accept such a defense, seek legal communication on the all-time style to proceed.

If y'all don't owe the debt

When you're sued for a debt you don't owe or for an corporeality y'all dispute, two words can give you a potent defense: "Prove it." At the hearing, you can ask the creditor to provide the original debt contract and to prove why you owe the amount specified. If information technology tin can't, the judge may dismiss the case.

Acceptable documentation is primal, just also seek the help of a qualified legal professional to assistance you navigate this process.

A lawsuit for a debt you lot don't recognize may be the result of identity theft, so yous may desire to cheque your credit report  for activity you don't recognize.

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Source: https://www.nerdwallet.com/article/finance/sued-for-debt-what-to-expect

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