Debt Settlement and Law Suits
Creditors and Lawsuits
Let’s be Frank.
Anyone can sue you at any time for almost anything. The world is full of lawsuit happy people. Creditors do have the right to sue you if you don’t pay them. Plain and simple. It’s a litigious happy society.
That being said, many debt collectors will use the terms ‘law suit’, ‘judgement’, or ‘garnish your wages’ in an attempt to scare you into going on some kind of a payment plan with them. They will say that they are going to ’seize’ your next paycheck… They will threaten to seize your bank account… I even had one lady call (crying) to ask me if they could really take her dog. Yes… her dog.
These are simply scare tactics.
Collection Agencies and Threats
Each and every one of these threats could potentially be completely illegal according to the “Fair Debt Collections Practices Act”. If a collection agency uses threats that they cannot legally carry out, you have a potential lawsuit.
Actual law suit actions are relatively rare in the scope of things, and can not just happen by your ‘next paycheck’. There are many steps involved, including court approval, preceded by a lawsuit, judgement, authorization obtainment, and formal documentation. A good debt settlement company will see any obvious warning of this type of action, and as long as you are doing your part, and forwarding on the communications that you receive in the mail from your creditors, you can help to prevent this.
Debt Settlement Help With Lawsuits
When choosing a debt settlement company it is always important to ask what they will do for you in the event of a lawsuit. The only way to prevent a lawsuit from happening is to continue paying your minimum payments, or by filing bankruptcy… Just the thing you can’t do, are struggling to do to your healths demise, or are trying to avoid.
That being said, a legitimate debt settlement company will address this issue with you with confidence. What you want to hear is that, while they can not represent you in a court of law, they will do everything in their power to stop a law suit from happening. A good debt settlement company will drop everything else that they are working on for you, and begin negotiations to get you a stipulated settlement with your threatening creditor. What this means is that they will earmark a portion of the money you are setting aside, or additional funds that you can come up with, to be sent to that creditor on a monthly basis, while still concentrating on getting you into a position that you can settle with that creditor.
Good settlement companies don’t just give up. A good debt settlement company will keep on with their efforts to get you a settlement throughout your savings process. Creditors would much rather come to an agreeable compromise than go through the costly process of litigation.
Next: Debt Settlement and Tax Questions
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