Are collectors calling you day and night?

Are you having trouble keeping up with your bills?
Are you drowning in debt and living in fear of your creditors?

If you answered YES to any of the above questions and you are thinking about bankruptcy, credit counseling, debt management plans, home equity loans or debt settlement; this information is for YOU!

This section of our website is designed to inform you about the collection process and the SCARE TACTICS used by debt collectors so that you don't have to live in FEAR. Your biggest weapon in the battle against debt collectors is KNOWLEDGE. Study the following information closely and you will soon realize that there is really NOTHING to fear in the collection process and you will be armed to do battle with even the best debt collector.

 

Threats of Lawsuits

The most lethal weapon that collectors possess is the threat of a lawsuit. The average person is scared to death of being sued and the collectors know this. Most collectors will threaten legal action but few will follow through with it. Considering the costs involved and the outcomes of many court cases, most companies have come to the conclusion that it’s just not worth it to sue.

Many collectors would have you believe that they can go to court, sue you for more than what you owe, put a lien on your home, garnish your wages and you won’t have any say in the matter.

NOT ALWAYS THE CASE! Judges are unbiased and rational human beings. They understand the economy and they know that millions of people are in difficult financial situations right now. They know that the credit card companies play a big part in the huge consumer debt problem.

Like you, the credit card companies have over-extended themselves and made some bad financial decisions. Although they’ve made up for a lot of their mistakes by charging ridiculous fees and high interest rates to the consumers that can least afford to pay them, they definitely don’t look like innocent victims in a court of law.

Of course, if you are sued and are found to owe the money that you are being sued for, you could get a judgment against you in court. But even the "worst-case scenario" (a judgment against you) is typically more favorable than the terms of the original credit card agreement (lower interest rates, no ridiculous fees and a reasonable period in which to pay it off). Debtors are often advised to "answer" a summons and show up at court to explain their financial situations to the judge. If you ignore a summons and don't go to court to defend yourself, a default judgment can result in a levy on your bank account, a lien on your property or even a garnishment of your wages.

 

If A Collector Does Happen To Sue, BE PREPARED!
For people who receive a summons for a debt, there are a few simple steps many people take in order to buy the time needed to build up funds for a settlement. Note that these are just general examples and each state and county has its own rules for answering a summons.

 

Step 1   Answering the complaints.

Most courts will have a form to answer the complaint (often called a general denial). The form can be filled out by yourself but don't be afraid to ask for help from your county clerk's office, a paralegal or an attorney if you don't feel comfortable answering it yourself. It is important to file an answer within the time specified on a summons. The answer is typically filed with the court and also served (mailed) to the law firm.

Attorneys often recommended that at least one thing in the complaint/summons be denied (The amount the plaintiff is suing for is typically the most common thing to deny). A debt can go through several collection agencies who can each tack on fees before it gets to court. Just because a debt is owed, doesn’t mean that the amount claimed is correct. Often, collectors are hoping that debtors don’t show up at court so that they can collect on these bogus fees. If the debtors are not there to defend themselves, the judge will usually have to take the word of the collector.

If a case were to eventually get to court, the judge may ask the defendant if he owes the debt. The defendant may say something like "I admit to owing some debt to but I do not admit to owing the total amount in question.". The judge may press the issue by asking a specific amount the defendant thinks he owes and he may reply "I don't have all the information to make that calculation right now.". This could open the door for a potential settlement down the road and buy more time to build funds.

     

Step 2   Giving Affirmative Defenses.

One Affirmative Defense that has worked well in the past is to opt for arbitration. Many credit card agreements contain an arbitration clause that allows for either party to opt for arbitration to settle disputes. The defense may read something like "I elect to have this dispute resolved by arbitration as allowed for in my original credit card agreement.”  Advantages of arbitration include: allows for a delay in the legal process, less formal than court, less need for representation, no public record, allows for a more relaxed atmosphere to explain hardships.

Another Affirmative Defense people use effectively when arbitration is not possible is "The balance of the account claimed by the plaintiff is not accurate and the amount owed is in dispute." along with "A serious financial hardship exists that prevents payments of amounts that are not in dispute.” You must decide what is best for your circumstances.

 

Step 3   Filing Counterclaims.

Often, throughout the collection process, various collection agencies working for the plaintiff will have violated the laws associated with the Fair Debt Collection Practices Act (FDCPA). Debt collectors are notorious for violating these laws and it is often effective to file counter claims to make them pay for violations. It is a good idea for debtors to become familiar with the FDCPA and to gather evidence to use for possible future claims.

 

There are typically 2 types of creditors, Original Creditors and Debt Purchasers. Sometimes during the collections process, an original creditor will "give up" on trying to collect a debt and will sell it to a third party debt purchaser. Debt purchasers often buy blocks of debt for pennies on the dollar and typically don't get proof that a debt is owed and that the amount owed is correct. They often use the court system to try to collect their debts, hoping that the debtor doesn't show up to court so they can get a default judgment. Debt purchasers often use signed affidavits that say the debt is owed without having actual proof. A typical tactic for fighting debt purchasers in court is to make them produce original signed contracts and statements (which they rarely have) as proof that the debt is owed.

 

No one should ever admit to owing a debt if they are unsure the amount claimed is correct and legally collectable.

If you’re in some type of debt program or if you are actively doing something to take care of your debt obligations, you are way ahead of the game when it comes to the court system. Judges often frown on creditors tying up the court system when debtors are doing something proactive to take care of their debt.

 

 

Legal Disclaimer

Everyone’s situation is different and not all methods presented will work 100% of the time, the information provided is designed to help you understand the process and arm you with knowledge. The information provided is not intended to give anyone legal advice, and if you feel you need to speak with an attorney for professional advice them please contact an attorney and get legal advice. Most attorneys will offer a free consultation.

 

To download a copy of Scare tactics ---Threat of Lawsuits please click the link below

 

Titan-Threat-of-Lawsuits.pdf (35k)