A debt collector may sue you for not paying a past due on a debt. They are a third-party agency that the creditor hires to collect the money from you.
In such unfortunate instances, people do not know what to do. However, if that’s the case, then do no panic.
Here we will cover steps one can follow if a debt collector has sued them. Let’s check out the points to know more.
Know the Steps
Before moving to the other steps, you should check the timeline of events that happens when a debt collector sues you. Now, this information can vary. However, it will have some similarities with your scenario
- When a debt is 180 days past due, you might receive a call from the debt collector telling you the same.
- After that, a debt validation letter will be sent to you by the collector within five days. It signifies your debt amount, creditor name, the dispute process if it’s not yours.
- A verification letter can be requested from your side if you feel clueless about the debt. They will send the letter within 30 days of notice.
- If the debt is correct, you have to develop a plan and inform the debt collector about the same.
- If you fail to pay the debt collector, they may sue you. Now, you will get a court notice with an appearance date for the same.
- The court will favor the debt collector if you do not reach the court on the appearance date.
- Lastly, a default judgment/court order will be placed ( after 20 days of lawsuit service) against you.
Respond to the Debt Collection Lawsuit
If you have faced a somewhat similar instance, it’s time to respond to the debt collection lawsuit. Nobody likes to receive a lawsuit. You might feel anxious and scared.
However, do not ignore it. That’s because it will do more harm than good. While the situations are challenging, it’s time to be strong and respond to them rather than running away.
If you do not appear in court, managing the situation can get tricky. Your attorney might face difficulties as well.
Challenge the Lawsuit
There are some instances where you can challenge the lawsuit. Usually, when one feels that the debt is invalid, they do the same. Here are some of the reasons where you can do so
- If you do not have any debt and they are suing the wrong person.
- The total debt amount mentioned is inaccurate.
- The debt has already been paid by you.
- The statute of limitations (time within which the debt collector can take debt amount from you) has gone past the deadline.
With the above scenarios, you can oppose the lawsuit and ask for a dismissal. Always carry the validation letter to display information like creditors’ name, debt payment status, the debt amount, and status of limitations. Besides, if you feel that your rights fail to comply with the debt collector, bring evidence to the court.
Decide whether to accept the judgment.
There are numerous ways to know if you should accept the judgment or not. As per the scenarios, here’s how you should move forward
- If you want to accept the judgment, make sure to hire a lawyer.
- If you accept the judgment but do not want to go to court, request for a settlement outside the court.
- If the debt is noteworthy and tough to meet, opt for bankruptcy.
- If you lack the funds or wages, check if you are judgment proof.
So, this is what you can do if a debt collector sues you. While the process is a bit complicated, with the proper assistance, it’s manageable. Make sure to give it a thorough read to grasp complete information.