Can Collection Agencies Sue Me For Outstanding Debt?

The question that many people are asking is ‚can collection agency sue for a debt?‘ With the amount of people suffering financial hardship due to the current economic crisis the number of people facing difficulties paying their bills is increasing rapidly and for the time being, at least, this trend shows no sign of reversing.Previously, lenders who had borrowers that had fallen into arrears would normally, only go as far as to post negative credit information upon the debtors credit record and send out collection agents in order to recoup outstanding amounts, but the desperate national and global financial situations have dictated that stronger methods should be used by lenders to recover outstanding debt.

If a person finds themselves in debt and collection agencies have started recovery procedures such as calling and sending letters advising that the debtor is to make payment there is a distinct possibility, especially if no payment or payment arrangement is agreed,  that the collection agency may file a lawsuit against them.

There are certain laws however, that do provide a degree of protection for the debtor, where lawsuits against them are concerned; if for example the debtor has been threatened with being sued in an abusive manner, they have every right to ask the collection agency not to contact them again!

This stems from the Fair Debt Collection Practices Act (FDCPA), a bill passed by congress in 1978, refined further in 2006, to stop the harassment by collection agencies of debtors. The number of debtors filing for bankruptcy was reaching epidemic point back in the seventies due to excessive pressure being used and this was not of benefit to anyone.

Collection agencies are not allowed to contact a debtor at their place of work or use abusive or threatening language towards them, and although the legislation cannot stop the collection agency filing a lawsuit against the debtor it does ensure that whatever the outcome, the debtor will not face any undue hardship. The pursuing agency can inform the debtor of their intent of filing a lawsuit against them but, if there is no actual intent on behalf of the collection agent to do so, it is classed as harassment and a complaint an be filed against the agent.

The FDCPA also forbids an agency filing to sue for a debt at a court that is not close to a debtors home and in many cases, unless the debt is of considerable size, the agency will be unwilling to chase the debt in court if the debtor lives a long distance from the debtor. This is pretty much a rule of thumb but anything further than three hours driving time between the debtor and the collector and the chances of being sued diminish greatly.

Be Free in Three

If a debtor feels they are being harassed too much or they wish the collector to stop contacting them, they can request them to do so, by law they have to stop. Should they ignore the request, you are entitled and encouraged to contact the Federal Trade Commission (FTC) website or directly and make a formal complaint.

Finally, once this process has run its course and the collector has informed the debtor of their intention to take them to court, the debtor will be issued a subpoena. This subpoena will request the debtor to appear at court, on a specific date. Should the debtor fail to appear at court, a judgment will be passed in their absence, this is usually not a good thing as it could result in the collector being given the right to garnish the debtors wages at source, so it is always advisable to turn up for any court action.

So, in answer to the question; ‚Can Collection Agency Sue for a Debt?‘, the answer unfortunately, is yes they can, but many are still seeing this as a last resort and through negotiation and arbitration a resolve can usually be found without the need for such action.

For more information about credit card consolidation and debt consolidation or if you would like to know more about a little known, but extremely effective, method of debt elimination that will clear you debt in 3 to 5 years, visit: credit card consolidation

If you would like to receive regular tips and advice sent directly to your desktop on how to deal with debt why not check out the ‚Dealing with Debt‘ elertgadget on the left!

Leave a Comment