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Being sued by a debt collector is one of the most stressful things a person can experience. It’s a situation that can be crippling and dread-filled with seemingly no way out. Despite the emotional, and, at times, physical burden of debt, it’s estimated that 77 million Americans are living under the strain of this reality.

The financial impact of COVID has only compounded the problem. Coronavirus left many responsible, hardworking citizens in difficult circumstances. With rising inflation rates and an economy strained by lockdowns, it’s no secret that people are continuing to struggle financially. Unfortunately, debt collectors are not sympathetic to any of the harsh realities that millions of Americans are facing. If you are one of the millions of people struggling with this burden, the attorneys at The Sands Law Group APLC are able to help. Call today for a free 15-minute consultation (213) 788-4412.

What is a Debt Collector Lawsuit?

If a debt has been past due for several months, lenders will often sell the debt to a collection agency. Collectors at an agency will approach the debt full force and stop at nothing to get paid, regardless of the circumstance of the borrower. While debt collectors have a variety of tactics, one of the more common ones is to try to force collections through the court and open a lawsuit against the debtor. The consequences of a debt collection lawsuit can range from wage garnishments, property liens to bank account freezes, all of which can have a serious negative impact on your life and financial well-being.

Ignoring the lawsuit is not advisable under any circumstances. This can lead to a default judgment, which gives the collection agency exactly what they’re asking for, regardless of the financial means of the debtor. Responding quickly to a debt collection lawsuit is essential.

How to Respond to the Lawsuit and Debt Claims

The most crucial action you can take when being sued by a debt collector is to respond. You can respond yourself or through an attorney. Regardless of whether you think you owe the debt or not, responding will force the debt collector to prove that you owe the debt, that the amount is accurate, and that they have the legal right to sue you. Ignoring the lawsuit will put you in a worse position than responding to it. Responding quickly will give you better options in terms of resolving the debt and cost you less in fees.

Challenge the Lawsuit

There are many reasons to challenge a debt collector lawsuit. Because debt collectors are never the original lender, certain details may be used to your advantage. Depending on your location, debt collectors may not legally be allowed to collect on a debt after a certain period of time. This duration can range from three to 20 years, depending on the circumstance. Debt collectors also make mistakes. There are many examples where debt collectors have gone after debts that were already paid off. This is an error on their part, and under no circumstances should you be responsible for a debt that was already resolved.

It’s also possible that the debt may not even belong to you or if it does, it’s possible that the numbers are skewed or that the statute of limitations for that debt has already passed. Regardless of the reason, debt collectors make frequent mistakes and it’s important that you remain informed so that you are not paying a debt that is not legally binding.

If you disagree with any amount of information presented in the lawsuit, it is within your right to fight it. You may also challenge a lawsuit if you feel that the agency has violated the Fair Debt Collections Practices Act and any of your rights as a consumer. Contacting an attorney will ensure that you approach the collector with the best possible defense.

Consider Alternatives

If you have no reason to contest the lawsuit, there are two main alternatives to consider when facing a debt collector: settling or filing for bankruptcy. When you settle on a debt, you often pay less than what you owe. Because debt collectors buy debt for cheaper than what it’s worth, they’re often willing to settle. This will provide the collectors with some payment while allowing them to avoid court and legal fees. You pay less, and they drop the lawsuit.

Filing for bankruptcy is another means to get out of debt collection. Bankruptcy will absolve you from your debt and can prevent a bad situation from becoming disastrous. However, bankruptcy isn’t the best option for everyone. It can have an extremely negative impact on your credit and overall financial health.

What Happens If I Don’t Respond?

Ignoring the notices and reminders won’t make the lawsuit disappear. If you ignore the lawsuit, there’s a good chance that the case will go on without you, making it an easy win for the debt collectors because the court will side with them by default. If this is the case, the court will order you to pay the debt. This means that the debt collector may be able to take money from your wages or bank account or put a lien on your home or property.

What Do Debt Collections Do to Your Credit?

If a debt collection agency gets hold of your debt, they may report it as a separate account on your credit report. This can damage your credit score in a drastic way. If the collection agency made a mistake and the information is inaccurate, you are able to file a dispute.

However, if the collection agency is valid, the account they opened will remain on your credit report for seven years from your first missed payment. The best course of action is to contact an attorney as soon as you start getting notices from the agency. They’ll be able to help you face it head on.

How a Debt Collector Attorney Can Help Your Case

Your best course of action when dealing with a debt collection lawsuit is to contact an attorney immediately. The right attorney can make all of the difference in your debt collection case. It’s a worthy investment that will protect your credit and overall financial well-being. The attorney can also work directly with the collection agency, so you won’t have to contact them yourself. A skilled and experienced attorney from The Sands Law Group APLC can help with any debt-related matters. Call us today at (213) 788-4412 or contact us online for a free 15-minute consultation.