You have been threatened with a lawsuit from a collection agency about a past due debt. Since you are still uncertain as to whether legal action will be taken, you are left wondering when will a collection agency sue me? While the answer might not be definitive, and you might now know if the debt collector will take legal action, here are a few tips regarding when legal action might be taken.
There is a risk of a collection agency deciding to sue you. Here are some situations to consider.
- When you are attempting negotiations with a debt collector or a creditor, you should be aware that if your negotiations fail you could be sued. If you can pay the creditor at all, assess the situation and understand your risk before you stop paying or delay payment in hopes of getting a reduced settlement or setting up an alternative plan for repayment.
- Lawsuits are slow and expensive. If an out-of-state creditor sues you in your home state, a local collection attorney must be hired. That lawyer must be paid regardless of whether you pay your debt and regardless of whether his collection efforts are successful. There is the chance the creditor will not recover the $2,500 or so he is paying the collection attorney to sue you. This means that the creditor is most likely going to go through all the other options before filing a lawsuit. If the debt is secured, the collateral is going to be repossessed first, so be ready. If it is unsecured debt, a reduced settlement might be accepted, or you could get a new payment arrangement.
- Large creditors are not going to waste their time and efforts suing over small debts. If you receive a letter saying a big credit card company is going to sue you over $250, the likelihood of legal action is slim. The attorney’s fees would cost more than the debt, and the credit card company is not going to risk losing all that.
- The odds of a collections suit for debts of less than $1,000 is very low. This is especially true if the creditor is a larger corporation. But, if you owe a small business in your town or the next town over, the odds of them suing you even for a small amount is much greater.
- If you don’t stand up for yourself, you are much more likely to be sued. If you claim that you don’t owe a debt for one reason or another, and you have proof to support your claim, the odds of a lawsuit are decreased greatly.
Consult With a FDCPA Lawyer if You are Wondering If a Collection Agency Will Sue You
If you are being threatened with a lawsuit for a bad debt, consult with a FDCPA attorney in your area. A lawyer can help you review your options and determine the best approach for your specific situation.
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