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What do you do if a debt collector is suing you?

So you’re being sued by a debt collector.

A lawsuit is the most aggressive form of debt collection that can be used. As such, it’s a major fear for many consumers, including our own clients. We’re here to tell you, even if you are served papers you still have options. There’s a few things you can do if you’re being sued by debt collector.

The worst thing you can do is nothing. Ignoring the summons will not make it go away, unfortunately. Failure to show up in court can result in a default judgment for the debt collector, or more. The court will also award additional fees against you to cover collections costs, interest, and attorney fees.

My debt collector is suing me, what do I do?

If you’re a client of ours here at CFF, the first thing to do is call us. Tell us the details about the filing and we’ll proceed from there. Each situation is different and is handled uniquely by our expert negotiators. But, our blog isn’t only for our clients, it’s for all consumers. With that in mind, here’s where to start if you’re facing a lawsuit from a debt collector.

The first requisite is that you respond to the lawsuit. You can either respond personally or through an attorney, but you must do so by the date specified in the paper work. Being sued by a debt collector is not something to be taken lightly.

When you respond, the debt collector will be required to prove to the court that the debt is indeed valid and that you owe the debt. This is an important factor. Keep in mind, your debt has changed hands one or more times before it’s gotten to this point. This step ensures all collections companies along the way have reported your debt, and it’s fees accurately.

Before we look at other actions you can take, we need to understand what it really means to face a lawsuit.

Court Judgements can only be issued or changed by the court.

Judgments give debt collectors much stronger tools to collect the debt from you. You may also lose the ability to dispute that you owe the debt. Depending on your situation and your state’s laws, the creditor may be able to:

  • Garnish your wages
  • Claim against your property
  • Move to freeze all or part of the funds in your bank accounts

A judgment is a court order which can be changed only by the court. It’s very difficult to get a judgment changed or set aside once the case is over.

Consult an attorney, one who specializes in debt collection rights.

Consult an attorney to learn more about your rights if you are being sued by a debt collector. Some attorneys may also offer free services, or charge a reduced fee, such as through your local bar association. You should try to find an attorney who has experience in the Fair Debt Collection Practices Act and debt collection issues.

The FDCPA is a federal law which provides limitations on what debt collectors can do when collecting certain types of debt and covers how debt collection is reported in credit reports.

Keep detailed records of your creditors actions.

This is crucial, especially if you’re experiencing any of the below violations. If the creditor suing you has committed any of the violations outlined in the FDCPA, they are going to have a tough time winning in court.

In fact, we see people receive complete debt forgiveness, and even cash refunds as an outcome from these lawsuits. This is because the creditor suing was actually in violation of several rules set forth in the FDCPA.

Threats of litigation often start as a scare tactic from an aggressive debt collector. This debt collector may or may not be complying with federal regulations in their contact and collection practices. The end goal for this collector is to simply scare you into paying your balance. Generally, they don’t want a lawsuit any more than you do.

Common collector actions that violate the FDCPA

Harassment.

Debt collectors cannot harass you in any form, be it over the phone or through any other form of contact. If you believe you are being harassed, keep all records if written and document your phone calls. These will be key pieces of evidence if you face a lawsuit from this collector.

Representation by attorney.

If a debt collector knows that an attorney is representing you about the debt, he must stop contacting you, and should interact with the attorney instead. If the collector continues to call you after they have been notified of representation, document all instances.

Some examples of harassment are:

  • Repetitive phone calls that are intended to annoy, abuse, or harass you or any person answering the phone
  • Obscene or indecent language
  • Threats of violence or physical harm
  • Publishing lists of people who refuse to pay their debts
  • Calling you by unknown numbers

A Debt collector can’t misrepresent themselves. The FDCPA clearly specifies that debt collectors cannot use false, deceptive, or misleading practices which includes mis-representations about the debt, including:

  • Amount owed
  • Pretending to be an Attorney when not one
  • False threats of your arrest
  • Threats of any illegal actions

Maintain detailed records of the communications.

Try to keep good records of all of your communications with the debt collector. These are likely to be helpful as legal proof in the future. It is always a good idea to maintain file of any letters or documents of communication with the debt collector, too.

Also, record the dates and time of conversations along with the notes about your discussion with the debt collector. These records can help you if you have any dispute with the collector, or when you meet a lawyer, or if you are required to go to court.

Sample Letters by CFPB.

The CFPB has prepared standard sample proforma of letters, along with tips on using them. These can be used to respond to a debt collector who tries to collect a debt. These sample letters may help you get information, set limits, stop any further communication, or exercise other legitimate rights.

Remember, if you really owe the debt, seek the creditor before the hearing actually starts. This is always your best option, while not everyone is in a position to follow it. Call the collector. They may not be nice, but you’d be surprised the power you actually have over them. Offer a payment arrangement you know you can afford to get caught up. Or, if you’re able, offer a lump sum settlement. Even if it’s low, they may go for it, you don’t know what that debt cost the collector.

The point is, communicate. If they are unable or unwilling to work with you, then you’re no worse off than before.

As always, we’re always here to help with your debt situation before it gets this far. When in our program, we handle the calls, letters, and advise on the lawsuits. If you’d like to discuss your personal debt situation, please don’t hesitate to reach out here. Our certified debt consultants can help. Consumers have rights, and with a little education can use them to their benefits.

 

Your partner in debt relief,
Consumer First Financial