by Susan Paige
Being in debt is bad enough. Being sued for debt is even worse.
If you’re in this unfortunate situation, you’re not alone. At least 70 million Americans are facing debt collection right now.
And with the economic impact of the current pandemic, even more of us will end up in financial trouble.
Does that mean all hope is lost? Of course not! Dealing with debt collectors is a challenge, but it’s not insurmountable.
In this post, we’ll provide some expert tips about what to do if you’re being sued for debt. Read on to learn more—your bank account will thank you later!
Don’t Ignore the Problem
The #1 mistake people make when they’re being sued for debt is pretend it isn’t happening. The worst thing you can do is fail to respond to the summons or complaint.
If you choose not to answer, the collection company will win a default judgment in their favor. This gives them even more power over you, including wage garnishment or legal fees.
As scary as a debt collection lawsuit is, silence is not the answer. Without admitting liability, file an answer with the Clerk of Court and send it via certified mail to the collection agency.
Know Your Options
After you send off your response, what’s next? One or more of the following options may be your best defense.
1. Challenge the Company’s Right to Sue You
By the time your debt reaches a lawsuit, it’s probably been sold many times. By asking for a chain of paperwork leading back to the original creditor, you may be able to get the case dismissed.
2. Require Proof of the Debt
Similar to the first point, this involves asking the collection agency to supply all documentation leading back to when you first opened the account. If you can show that the original credit agreement didn’t include current fees or charges, you could win the case.
3. Factor in the Statute of Limitations
Laws vary by state, but creditors typically have between 4-6 years to file a debt collection lawsuit. You can learn the latest news about consumer protection and debt-related lawsuit help if you’re unsure of debt laws in your area.
Hire an Attorney (If You Need To)
Despite your best efforts, you may find that dealing with debt collectors is more than you can handle.
Many attorneys offer free consultations to discuss problems just like yours, so take advantage of those offers. They’ll be able to advise you of options you might not have been aware of.
If you’re lucky, they might even discover that the creditor acted illegally by suing you. They’ll likely take your case (and win it) while the creditor pays all the legal fees.
Being Sued for Debt? You Can Win the Case!
Being sued for debt might seem hopeless, but it doesn’t have to be. By being proactive, you can successfully negotiate the legal battle.
Respond promptly to the lawsuit, challenging their rights while requiring proof of your debt. Don’t forget about the statute of limitations if it applies.
If you find yourself in over your head, seek legal counsel from an attorney. You might get the answer you need from a simple free consultation.
Would you like expert tips on how to get out of debt for good? Check our Getting Out of Debt 101 page for more advice.