How to Respond to a Debt Collector Lawsuit
A debt collector lawsuit can bring many feelings of anxiety and fear for a person who has been served. Being hit with a debt collection lawsuit should prompt you to take appropriate action to protect yourself as soon as possible.
There are a number of different steps that you can undertake early in the process to give yourself the best possible chance to handle this situation.
If you are sure that you don’t owe, or even if you personally don’t owe, you don’t want to avoid showing up in court as this could lead to a default judgement for a debt collector. The number one mistake made when a borrower sues for owed money is failing to answer the notice.
If you do owe the debt and are unable to pay it, you may think there’s nothing you can do and will simply ignore it. However, this allows a collections agency to obtain a default judgement against you, including the eligibility to remove money from a bank account or wage garnishment.
Responding to a debt collector lawsuit is extremely important. File your response no later than 20-30 days after service. You may be able to challenge the plaintiff’s eligibility to bring a lawsuit by challenging any standing to bring legal action in their name. The collection company must prove that they have the ability to collect. Furthermore, you will want to have them prove what is owed.
An initial signed agreement and the account balance from zero to the present is extremely important. Debts could have changed ownership multiple times and it is important to see the paper trail.
Even the original creditor may not have the appropriate documentation regarding the debts the consumer owes. You may also question the statute of limitations to defend yourself.
Creditors often have a max time period of four to six years to sue to collect a debt. Beyond that period, the statute of limitations applies. However, this does not always block collectors from suing because they may be counting on a borrower’s inability to show up for court.
If the borrower raises the statute of limitation’s expiration as a defense, the collector will not be successful. If you make any payments on that older debt, however, you could kickstart the clock once again.
Talking things over with a bankruptcy attorney can help you identify whether or not you can raise the statute of limitations as your defense. The next thing to consider when responding to a debt collector lawsuit is a countersuit.
In the event that a debt collector has in any way violated guidelines of the Fair Debt Collection Practices Act, you could be eligible to sue them but you’ll want to talk directly to your attorney first regarding consumer lending practices and the alleged violations.
Debtors are often hesitant to bring in an attorney when there’s a lawsuit for a debt that they do owe perhaps because of a stigma or embarrassment surrounding it.
A debtor may also make the mistake of assuming that they cannot afford one, however, a free consultation can help you figure out whether or not the debt collector has violated the law or you’re eligible to pursue a countersuit.
This initial consultation can help give you a great deal of information about how to proceed and how to avoid many of the most common mistakes.
Consult with the dedicated lawyers at McDonald Worley today to learn more about your rights.