Most of the time, owing a debt can always take a turn for the worse. There have been countless times where such matters have been taken to court for different reasons. Debt collection lawsuits are common occurrences, but nobody wants to be served one ever in their lives.
A debt collection lawsuit occurs when a creditor files a petition with the court to begin a lawsuit against a consumer who owes them money. What prompts debt collectors to file this includes the typical reasons like long withstanding debts that consumers avoid paying. It’s expensive and time-consuming, which is why you should find a way to settle loans, bills, and other debts you need to pay.
Things become even more difficult if you get served, and you don’t know what to do next. Knowing how to respond and the steps to take after learning about the suit is key to dealing with it effectively. You can learn more about that in this blog as it discusses ways to handle a debt collection lawsuit.
Confirm the timeline of events
You should understand the process of a collection lawsuit to handle it properly. You can do so by verifying the timeline of events beginning with the day you received a notification from a debt collector about your overdue debts. Although the timeline varies from person to person, it should be uniform in development.Backtracking the events that lead to the lawsuit is important because it helps determine its legitimacy. You can’t learn how to win a debt collection lawsuit if the one filed against you is a scam. Some people take advantage of situations like this to steal money from you, so verifying the timeline of events leading to the lawsuit helps prevent that.
Things that should happen before a collector sues you include receiving a notification of debt collection via phone call or letter from the collector. Within five days of receiving the notification, they’ll send you a debt validation letter that states how much you owe and the creditor’s name. If you don’t think the debt belongs to you, you can ask the collector for a verification letter that they must send within 30 days of notice.
If it’s valid, you need to respond to the collector and create a plan for paying off the debt. If you don’t repay, the collector can then sue you.
Respond to the lawsuit
Once you’ve been notified of the collection lawsuit, the next step is to respond to it. Failure to do so will result in a default judgment against you, opening new ways to collect your debt, including wage garnishment. In some cases, the defendant (the person the collector filed the suit against) ends up paying more than the debt they owe because the collector added other fees due to their failure to respond to the lawsuit.You can respond to the lawsuit via legal briefs called an answer. Furthermore, it must be done within the set period by the lawsuit summons, which is typically 20 to 30 days from the date of the notice.
Challenge the collector’s right to sue
You have the right to challenge the collection agency’s or the company’s right to sue you for your debts; for valid reasons, of course. When you challenge the entity that owns the debt, they’ll be required to show proof that they have the right to sue you over it.If you choose not to respond to the lawsuit and default because you think the debt is illegitimate, you can also challenge it. Valid reasons people opt to challenge a collection lawsuit include the wrong person being sued, the debt already paid, or the incorrect amount.
Decide whether to accept the lawsuit
If you decide not to challenge the lawsuit, you should decide whether to accept it or not. If you decide to accept it, you should consider hiring a lawyer or negotiate an out-of-court settlement.If you deem your debt unmanageable, you can also consider filing for bankruptcy. Doing so will cease all debt collection efforts against you. However, your bankruptcy is subject to approval under the law, and you’ll be required to present proof of it to gain that approval.
Wrap up
When you’re served a collection lawsuit, the important thing is to verify and respond. From there, you can decide whether you should challenge, go to court, or come up with an off-court settlement. Also, this should remind you to settle all your debts, so you won’t get sued because the best way to handle a debt collection lawsuit is not having to deal with one at all.Author’s Bio:
Deinah Storm used to work in the corporate world as a marketing affiliate. She quit her job to pursue her passion for writing, but to this day, Deinah is committed to educating consumers about the different marketing scams and how to avoid them.