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6 Steps to Take When a Debt Collector Threatens to Sue
You are sitting down to dinner, and the phone rings. You answer, and it’s a debt collector on the other end of the line threatening legal action if you don’t agree to a payment right now. These communications are stressful, but are they legitimate? Without the right legal experience and knowledge, knowing whether a debt collector can sue you and what you need to do to protect yourself can be challenging. If you’re receiving communications from debt collections, the steps below can help you regain control and protect your interests.
1. Stay Calm
The most important thing you can do when you’re facing a stressful situation is to stay calm, and this is also true when that situation is a contentious call with a debt collector. Representatives from collection agencies have one goal in mind: to get you to take action right away and pay the debt. To achieve this, they may use high-pressure tactics, including threatening legal action, to scare you into making a payment or agreeing to a payment plan. Remaining calm and refusing to act until you receive the details in writing can ensure you don’t make a poor decision based on fear.
2. Keep Detailed Records
Treat every communication with a debt collector as if you may need to provide this information in court. When you’re on the phone, ask for their first and last name, including how to spell it, and tell them you’ll be taking notes about the call. This should include the call’s time and date and anything discussed. If they offer you a discount to pay the debt in full or try to put you on a payment plan, record the details and ask them to send you a formal offer through the mail. Having detailed records can make it easier to remember information later and provide a paper trail of all communications.
3. Know Your Rights
There are both federal and state requirements for debt collectors, and you have rights as a consumer. Being aware of these rights can help you stop any harassing behavior on the part of the debt collector and be prepared to address any potential legal action. For example, a debt collector can only call between the hours of 8 a.m. and 9 p.m. They also generally cannot call you at work or contact family members unless they are trying to locate you or there has already been a judgment against you. Once a debt collector is aware that you are being represented by an attorney, they generally are required to communicate only with your attorney, which can help reduce some of the stress and ensure the debt collector is acting in accordance with the law.
4. Ensure the Debt Is Valid
Any time a debt collector attempts to collect on a debt, one of the first steps you should take is to verify that the debt is, in fact, yours and is accurate. Request verification of the debt in writing. Once you have made this request, the debt collector only has a specific amount of time to comply. If they can’t provide verification, they can’t collect on the debt.
It’s easy to swipe credit cards without thinking about how much you’re spending, and it is possible to forget about a debt. However, identity theft is more common than you might think, and getting collection calls for debts you don’t remember can be a red flag. Even in situations where the debt is yours, the statute of limitations may have expired. Agreeing to make a payment can restart the clock on this, so it’s essential to verify that the debt is yours and collectible.
5. Explore Your Options
If the debt is legitimate and the debt collector is threatening to sue, consider your options. Don’t ignore the debt, as this can lead to a default judgment against you and wage garnishment. Respond to the lawsuit with the help of an attorney. This may include filing a motion to dismiss if the debt isn’t valid or there is another reason why the creditor isn’t entitled to collect on the debt.
While bankruptcy is one option, it’s not the only one, and it carries significant consequences for years. Always consult an attorney before filing for bankruptcy to ensure you understand the process and how it will affect your debt.
In some cases, it may also be possible to negotiate a debt settlement. You agree to pay a lump sum that is generally less than half of what you owe, and the creditor forgives the rest of the amount.
6. Talk to an Attorney
When you are facing threats of legal action, it’s time to consult with an attorney. An experienced consumer protection attorney can help you respond to any legal action against you and identify any violations the debt collector may have committed. They can also represent you throughout the process, whether that means in court or in settlement negotiations.
Dealing with constant debt collection calls and threats from creditors can make an already difficult situation feel hopeless. But there are options that can help you stop these communications and fight back. If you’re feeling overwhelmed with debt or aren’t sure whether a creditor’s threats of legal action are legitimate, contact Khosroabadi & Hill, APC, to schedule a free consultation. Our firm serves San Diego and the surrounding area, and we can help you get back on track. Call (858) 240-2093 to get started.
