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Debt Collection Defense

There are certain times when a debt buyer or creditor will file a collection lawsuit in the attempt to get back some of the debts that are owed by the debtor. However, there are many instances where the creditor agency won’t be adequately prepared for a challenge against their claims, making it possible to raise a defense against the collection lawsuit. The following will take a close look at debt collection defense and what it entails.

Why Getting Documentation For Debt is So Important

When it comes to debt, it’s commonplace for a creditor to engage in the selling and servicing of these debts to other entities. This will typically occur for those that fall behind on their regular payments. After the debt has been sold, the debtor typically receives tons of phone calls and letters from the new debt owner as a means of collecting the debt that is owed. However, the letters and calls rarely contain information pertaining to the specific debt, which means that you can’t verify who the original creditor was or whether or not the amount sought by the creditor is even correct. If you ask for documentation in order to verify the debt once you’ve been sued and get nothing in return, there are plenty of debt collection defense options that will open up for you.

Ways to Defend Against a Debt Collection Lawsuit

Once you’ve received a notice that you’re being presented with a collection lawsuit, there are several ways in which you can defend against it with the help of our NYC bankruptcy law firm. If you are sued by a collection agency, the first thing you should do is make a response to the lawsuit. Many debtors that are made aware of the lawsuit through a complaint or summons simply choose not to respond. What they don’t know is that not responding is the worst thing they could do, as the collection agency will be awarded with a default judgment against you. This judgment will provide the collection agency with more ways of collecting any of the debts that are owed, such as directly from your bank account or by wage garnishment. As this is the case, it’s imperative that you respond to the lawsuit. We will help you with drafting a response, which is typically a short letter denying liability. What many debtors don’t realize is that the majority of collection agencies will simply choose to back down from their lawsuit or reach a settlement that is less that what was originally owed.

As touched upon previously, original creditors often sell debt to other agencies. It’s possible to challenge the lawsuit in court, which means that the creditor must provide accurate paperwork that displays when the transfer took place and if they have the right to sue in the first place. It’s also suggested that you get them to prove that you owe the amount they say you do. To do so, they must provide paperwork stating the exact amount. The paperwork could display an inaccurate amount owed or may simply not be as exhaustive as it needs to be to prove that you owe the debts that they claim are owed. Each of the aforementioned defense strategies can work wonders in turning the lawsuit into your favor. You should also look into the statute of limitations for the debt that is owed, as creditors typically have a maximum of 4-6 years in which they can sue as a means of collecting the debt. If the debt you owe is past this period, they will automatically lose the case.

If you owe a particularly large amount that you won’t be able to pay any time soon, then it’s possible to file for bankruptcy, which can still be done even after you’ve been presented with a collection lawsuit. Filing for bankruptcy will be a stay on any attempt at collection that is being made against you. If you’re considering taking this course of action, it’s recommended that you do so immediately after receiving a notice about the lawsuit instead of waiting until the court date.

How Our Law Firm Can Help

At our NYC bankruptcy law firm, we will help you to identify which debt collection defense method is best for you and will provide you with the optimal outcome. While it’s natural to worry when you receive a collection lawsuit, it’s important to understand that there are a wealth of options open to you to challenge the lawsuit and we will be there with you throughout every aspect of the process. Whether you choose to challenge their right to make a claim against you or simply file for bankruptcy, our services ensure that this process will be as efficient and stress-free as is possible.