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What to do if You are Sued by Debt Collectors

Have you been sued by debt collectors? Having legal action taken against you for any reason can be very unsettling and you may be unsure what to do.

You need to know from the outset that doing nothing is the worst option. Your best route to take is to speak with a Charlotte bankruptcy lawyer to discuss your options.

You Need to Take Action Right Away

You will need to respond to the lawsuit by the date mentioned in the court papers you were issued. Ignoring the matter will in all likelihood cause a judgment to be entered against you for the sum claimed by the debt collect that you owe them. You could be charged additional fees by the court to cover for collection costs or attorney fees.

A judgment can give your debt collector stronger tools to extract money from you. They may able to:

  • Garnish your wages
  • Take action to freeze some of all of your bank accounts
  • Put a lien against your property

If a judgment has been made against you, only a court can change it. You need to take action before a judgment can be entered against you.

What are my options?

You have the right to challenge your debt collector, and the first step in doing so is to force them to prove what you allegedly owe them. If the documentation is lacking or error-ridden, your debt collectors may have no case against you.

The state statute of limitations can also come into play if debt collectors try to sue you. In North Carolina, creditors have only three years or file a lawsuit against you. If legal action is taken against you after this period of time elapses, the collector will lose out.

Likewise, if a debt collector somehow violates the Fair Debt Collection Practices Act, it may be possible to countersue them. Your attorney will understand the provisions of the Act to see if your rights have been transgressed. A successful suit can mean you would be entitled to statutory damages amounting to $1,000, on top of punitive and economic damages.

Your last alternative is to file for bankruptcy is the amount you are being sued for is substantial. As soon as you file, an automatic stay will be initiated, stopping collection efforts in their tracks.

Don't wait to resolve your debt issues!

Filing for bankruptcy, as with any part of debt collection process, means you need to consult with a seasoned Charlotte bankruptcy attorney from Schwilm Law Firm, PLLC where you can discuss your financial and legal matter with us during a complimentary consultation.