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Author: Sergei Lemberg
When Will a Collection Agency Sue Me?
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General Rule: Several factors may determine when a collection agency will sue you. Some prominent factors include the following: (1) size of the debt; (2) size of the collection agency; and (3) current status of your debt.
When a collection agency takes over a past-due debt their goal is to get the debt paid off as quickly as possible. Typically, they will try other options before filing a lawsuit. It is much cheaper for a collection agency to negotiate a settlement with you or get you on a new monthly payment plan.
However, there may come a time when a debt collector will decide to file a lawsuit for a past-due debt. When a collection agency may sue you is not entirely predictable. However, certain factors will increase the odds of when a collection agency may sue you.
This article will highlight those factors that may contribute to a collection agency suing you sooner rather than later. Of course, sometimes a collection agency may sue you to harass you and coerce a payment unlawfully. If that’s the case, you have protections under the Fair Debt Collection Practices Act (FDCPA).
Factors That Impact When a Collection Agency May File a Lawsuit
Several different factors may determine when a collection agency will file a lawsuit. While no one can predict when a lawsuit will occur, consider these factors:
- Size of Debt. A collection agency is more likely to file a lawsuit for a larger debt. There is a cost to filing a lawsuit, including hiring a lawyer. A collection agency is not likely to file a lawsuit for a debt where they will make little if any money.
- Size of Creditor. This is somewhat related to the first bullet point. The larger the creditor the less likely they are going to file a lawsuit on smaller debts.
- Time Since the Last Payment. If you continue to make payments, even partial payments, a collection agency is less likely to sue you. If, however, you have not made a payment in a year or more you might receive a lawsuit soon.
- Communication. If you continue to communicate with a collection agency this may delay a lawsuit. This is especially the case if you are discussing settlement options or ways you can pay off the debt.
Of course, if this involves a debt that is not yours, the best way to avoid a lawsuit is by disputing the debt. When doing so, you should provide any evidence you have that the debt is not yours.
Frivolous Lawsuits and the FDCPA
Unfortunately, collection agencies will sometimes file a frivolous lawsuit. In some cases, they view it as a tactic to pressure you into making a payment. If a debt collector sues you without a bonafide reason they violate, among other things, the FDCPA.
Another type of frivolous lawsuit is when they sue for a debt that they know is time-barred. Each state has a statute of limitations. Once it expires for a debt, it is no longer legally enforceable. Whatever the basis for the lawsuit, a collection agency cannot sue on a debt they know is time-barred.
Note: If a third-party debt collector, not the original creditor, files a frivolous lawsuit, they violate the FDCPA.
Conclusion
Whenever you have a past-due debt there is a chance of a lawsuit. Of course, in certain situations, a lawsuit is likely to come quicker than others.
However, you can be proactive in dealing with collection agencies. For legitimate debts, consider negotiating a plan to pay off your debt. If a collection agency sued you or violated your rights under the FDCPA, contact a consumer rights attorney immediately.
About the author:
Sergei Lemberg is a consumer rights attorney, practicing since 2006, whose practice focuses on consumer law, class actions and personal injury litigation. He is known for a United States Supreme Court case (Facebook v. Duguid) defending consumers from autodialers under the Telephone Consumer Protection Act of 1991 to send unsolicited text messages. He is also the author of Defanging Debt Collectors, a book that teaches consumers how to battle debt collectors and win.
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