Debt Collection Problems

Debt Collection Laws

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.