Debt Collection Lawsuit? Here’s What You Should Know…

Have you been served with a summons from a debt collection agency or a credit card company? Chances are, if you have received a summons and complaint from a debt collection company, you have been ignoring debt collection efforts for some time now. Ignoring the issue has obviously not worked and now is the time to be proactive.

debt collection

First off, you will need to review the complaint, take a look at your particular situation and decide if you would like to explore settling the matter or go forward with the lawsuit and defend your actions.

Let’s say you review the complaint and acknowledge that the debt is correct, but you are not in a position to pay it in full. Do you have options?

YES, you almost always have options. More than likely you have received a summons and complaint from a debt collection agency rather than a credit card company directly. Credit card companies typically sell your debt to a debt collection company at a greatly reduced rate, therefore, the debt collection companies are often willing to negotiate a reduced settlement.

The lawsuit will cost you money to defend, so it is easy to understand that it will cost the collection company money to prosecute. When you contact the debt collection company, be professional and straightforward… layout what you can afford to pay and the terms in which you plan to fulfill your commitment.

Another option is to file for bankruptcy to wipe out the debt owned by the debt collection agency. Speak with a qualified bankruptcy attorney to discuss this option in more detail.

On the other hand, if after reviewing the collection lawsuit, you wish to go forward with the lawsuit you will need to put serious consideration into what your defense will be. Just because the debt may be correct you can still have a valid defense.

One downside to going forward with the lawsuit is that should the court find against you the creditor will receive a judgment and if you do not pay the judgment you risk your wages being garnished from your payroll, having funds seized from your checking or savings accounts or a lien may be put on your real property.

If you have chosen to defend the collection lawsuit, it would be wise to contact an attorney who can provide you guidance to the many defenses you may have. A collections attorney will guide you through the court process, and can not only represent you in the action they can also provide you bankruptcy advice if that proves to be a valuable option for you. The collections attorney will thoroughly review the complaint as well as your documentation and help decide what defense is your best option.

Here are just a few of the many defense options you may have:

  • The debt has been paid and you have back up documentation to prove the payment.
  • The debt has been discharged in a previous bankruptcy and you have the discharge documentation to prove your case.
  • The debt has expired pursuant to the statute of limitations.
  • The lawsuit may be invalid if the collections agency violated any of the Fair Debt Collection Practices Act. If so, you will need to have details regarding all of the violations.

Remember, just like any lawsuit, this is a gamble and having a valid defense does not guarantee a victory. Going into it armed with the best defense, a qualified debt collection lawyer and documentation to prove your case will help your odds but you must still acknowledge the risks associated if you lose.


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