Debt Collection

Unmanageable debt can creep up on anyone; a financial setback like a lost job, unexpected home repair, or emergency medical bill can quickly wipe out savings and force consumers to turn to high-interest loans and credit cards. With service fees and interest payments, the amount you owe can begin to grow faster than you can pay it.

The stress of living with debt and overdue payments can become overwhelming. Between a mailbox full of bills and your phone constantly ringing off the hook from debt collectors, it may feel impossible to get the weight of your debt off your mind. You may even receive notice of legal action pending against you because of the debts.

That’s why you should know about the legal protections available to you. Debt collectors must follow certain rules and you may have options if those rules aren’t followed. Arming yourself with this information could help you gain more control over your debt situation so you can start to get back on track.

What Do I Do if Debt Collectors Keep Calling Me?

If you fall too far behind on your bills, the company you owe money to may sell your debt to a collection agency, who will then try to recuperate the amounts from you instead. In many cases, these debt collectors will contact you relentlessly to get you to agree to make payments to them.

However, there are rules debt collectors need to follow when they call you, though some may not abide by these restrictions. These mandates come from the Fair Debt Collection Practices Act (FDCPA).

The FDCPA states, among other things, that debt collectors can’t:

  • Call you at unusual or difficult times, such as early in the morning or late at night
  • Tell anyone other than you, your attorney, or a related collection agency, that you owe a debt
  • Threaten you
  • Call excessively to annoy or harass you
  • Keep contacting you after you send written notice for them to cease, with a couple of exceptions

If a debt collector breaks these rules, you can submit a complaint about the behavior to the Federal Trade Commission, the Consumer Financial Protection Bureau, or your state’s attorney general.

You may have grounds for a civil lawsuit in some cases of debt collector harassment, if you can prove financial damages. Such a suit can come from an individual, or filed as a class action lawsuit.

What Do I Do if a Debt Collector Tries to Sue Me?

If you refuse to pay a debt, the debt collector may try to sue you for the money owed. When and how you respond to the lawsuit could significantly impact your case.

First, you should be sure that you’re truly being sued at that time. Companies may start by sending a demand letter telling you what you owe and when they expect payment by. A demand letter will often say that there will be a consequence, like a lawsuit, for not complying with the demands, but the letter is not itself notice of an actual lawsuit yet. That means you may have a bit more time to figure out your situation.

Once a lawsuit has been filed, you’ll be served with a formal complaint. The exact rules for service vary by state, so it’s important to verify the validity of the complaint you received. After you’re properly served, you only have a short window of time to respond. Failure to respond correctly and on time could result in a default judgment, in which the other party wins automatically and without a trial.

When responding to a complaint, it’s very often in your best interest not to admit to any fault or agree to pay any specific amount at that time. Your answer to the complaint can become part of the case against you if you aren’t careful.

Do I Need an Attorney for Debt Collections?

Many people who are sued for debt collections will work with a collections or bankruptcy attorney for their professional insight. Debt collection can quickly become a complicated case with severe consequences. Working with an experienced professional who understands the ins and outs of the federal and your state’s debt collection laws can help you negotiate with the creditor, build your case, and fight for you in court to help you get the best outcome possible.

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