What happens if you receive a phone call from a purported creditor demanding payment on a debt you don’t believe you owe? What happens if you are paid up on your credit card but you receive a letter saying you are in default for non-payment? What do you do if you truly are in default on a debt and the holder of the debt sues you?
These are all daunting situations and you have a right to be frustrated, angry and even scared. The skilled professionals at the BLC Law Center are used to dealing with these questions every day. If you need help in any situations like these, please give us a call today at (800) 551-7922 to set up your free consultation. We will also tell you here a few strategies to dealing with debt collection disputes and possible defenses against collection lawsuits.
Debt Collection Disputes
Unfortunately, in our electronic age, debt collection disputes happen far too frequently. It can be a matter of a transposed account number, a check sent to the wrong address or any other number of issues.
First, you need to verify that it is, in fact, your debt that you are being contacted about. There are thousands of people out there with the same name while social security numbers and account numbers can easily be transposed. Further, there are bad players out there who steal identities for a living. Don’t agree to anything with a creditor until you verify that it is your debt.
Second, keep accurate records, especially with your banking transactions, to be able to verify that you did indeed send in a payment on a certain date and that it cleared your bank on a certain date. Mistakes are constantly made where payments are applied to the wrong accounts.
Third, you should monitor your credit report at least annually. If someone has stolen your identity, your credit report is often the first place where a stolen identity can be noticed.
Fourth, you need to verify that the debt is accurate and truly in arrears. Debt holders do make mistakes and do not necessarily always follow the applicable law when it comes to collection actions.
Your rights are also protected by the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. Please refer to our summaries of those laws on our website as well.
If all of this checks out and you cannot pay the debt in a timely manner, your creditor may sue you to collect the balance owed them.
What To Do If A Creditor Sues You?
- Don’t stick your head in the sand and ignore the lawsuit. Most lawsuits are won by creditors simply because debtors do not reply to them and the creditors are awarded summary judgments. Don’t let this be you!
- When contacted by a creditor, do not admit that you owe the debt. It is possible that you do not but if you say that you do, it can possibly be held against you if you go to court.
- Don’t allow the creditor pressure you into any form of refinancing for the debt (such as placing it on a credit card). Oftentimes, you are only throwing good money after bad. Refinancing a debt that was originally at 10% interest at 24% interest is a bad move and can be nearly impossible to pay back.
- Collectors often pitch a settlement and try to pressure you into taking it. A $400 per month payment may sound good compared to paying off $20000 in one shot but if you cannot realistically pay it, do not agree to it.
- Don’t allow yourself to be bullied by debt collectors. They typically get paid based on a commission from how much they collect. Many are willing to engage in questionable tactics in order to bring home a paycheck.
- Understand your rights! Federal and state law offers you protection in many instances when debt collectors come calling.
- If you are in over your head, contact an attorney as soon as possible. This is a very trying and stressful time. Defending against lawsuits like this is a complex task that our experienced staffs are trained to handle.
To learn more about your legal rights, please give us a call today at (800) 551-7922 to set up your free consultation.