Your Options When Facing a Debt Collection Lawsuit

Anyone, rich or poor, can accumulate unmanageable amounts of debt. It isn’t always due to negligence or irresponsible spending. Sometimes your debt arises from circumstances beyond your control, such as a job loss or emergency medical bill.

Whatever the reason for your debt, you may find yourself served with a collection lawsuit, compounding your problems. This may not be a likely scenario; creditors may prefer to pursue other options, such as referring your case to a collections agency. However, if you do face a lawsuit, there may be ways that you can defend yourself with the help of a collections attorney who represents borrowers.

1. File for Bankruptcy

This is often a last resort due to the long-term credit implications. However, filing for bankruptcy can help you in the long term by discharging at least some of your debts so that you no longer need to worry about paying them. It also helps you in the short term by putting an automatic stay into effect that prevents creditors from contacting you.

2. File a Countersuit

Creditors must observe regulations such as the Fair Debt Collections Practices Act when attempting to collect from you. If you have evidence that a creditor violated this law, you may be able to seek compensation for any damages done to you by unfair collections practices by filing your own lawsuit against the creditor. A countersuit is the term for legal action that you file against someone who has already filed a suit against you.

3. Challenge the Creditor’s Right To Sue

An entity who files a lawsuit against you has to demonstrate to the court that it has the right to do so. This can be difficult because creditors often try to recoup losses on bad debts by selling them to other entities. If the creditor cannot demonstrate a right to sue, the court will likely dismiss the lawsuit. The creditor must provide paperwork documenting the chain of custody, i.e., who owned the debt when, leading back to a credit agreement bearing your signature, as well as accounting for the exact amount that you owe. The court may not ask for this evidence itself, but if you issue a challenge, it will probably back up the request.

Whether you are faced with a lawsuit or just a seemingly intractable debt, a collection attorney, like a debt collection lawyer in Tampa, FL from The Law Office of Michael A. Ziegler, P.L., may be able to help you determine what your options are. Contact a law office to arrange a consultation.

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