Debt collectors are not all the same. Some will try to collect your debt for a while and then give up, some won't call you after they get one letter from you, and others will harass you until they're blue in the face. Understanding if and
how a credit card company can sue you for unsecured debt is crucial.
So how do you avoid getting sued by debt collectors? You don't want someone who's going to hound you until their last breath just because of one unpaid bill.
In this blog post, I'm going to share 7 ways to avoid being sued by debt collectors so that you can live a more peaceful life without having to deal with their constant phone calls.
1) Always pay your bills on time
One way to not have debt collectors breathing down your neck is to pay your bills on time. When you do, have a written record of making the payment and file that with your other important documents. For example: Get a money order for the amount owed to the creditor (do not use personal checks) and include a note , signed by you on the back, saying "payment in full".
It's also helpful to keep copies of all payments made so that if there is a dispute later, it can easily be proven which bills were paid. Also recording these transactions can help show any potential tax savings from deductions as well as demonstrating willingness to pay what you owe.
Tips to Avoid Court Judgments
If a debt collector sues you, it's imperative to respond to the lawsuit promptly. Ignoring legal paperwork will almost guarantee a ruling against you.
There are a few options to respond appropriately:
- File an answer admitting or denying the allegations. Get help drafting it from legal aid or an attorney.
- Arrange to settle or pay back the debt, conditional on the suit being dropped.
- Assert a time bar if the debt is too old for them to sue on.
- Show up on your court date! Debt collectors often win default judgments against absent defendants.
You may also need to claim exemptions or make other arguments against garnishments. Don’t let a court judgment make the debt much harder to fight!
2) Know the difference between a debt collector and a lawyer
As a general matter, debt collectors are not attorneys and do not have the same expertise or knowledge with regard to the law. A debt collectors' ultimate goal is payment by any legal means necessary, while lawyers must always honor their client's wishes as to how they want to proceed legally.
Debt collectors are enforcers, whereas lawyers help you through the process. Debt collectors will be coming after you to get money for the person they're collecting for.
Being in a lawsuit is scary enough, never-mind losing one, and when we stand in front of the judge it's not easy. Yet there are lawyers who can help us get out with minimal damages or even have our debt forgiven completely.
If you owe someone one dollar, it's unlikely that a lawyer will be able to help but if you owe them millions it might provide some form of relief. For more information on debt collectors, read our article
how to deal with debt collectors when you can't pay.
3) Understand that you have rights as an individual
When it comes to debt collectors, your rights are outlined in the
Fair Debt Collection Practices Act.
The act prohibits such practices as using violence, making misrepresentations and threats, trying to obtain information illegally, and contacting you at work after you have notified them they're not allowed or unless both parties have agreed to the contact.
Debt collectors have annoying tactics like making false representations, making threats to ruin your credit score, and even calling you in the middle of the night.
The laws are pretty clear on what debt collectors can and cannot do to pursue collections. They don't have free reigns to do or say anything they want to, there are some limits to their power.
Here's a list of the things they CANNOT DO:
- Falsely represent that you owe a debt when you don't (defraud)
- Threaten to make problems for you if payment isn't made (extortion)
- Reveal or discuss your personal information with other people unless it is required by law
- Call before 8 am or after 9 pm unless federal
Recent Changes and Statistics
The Fair Debt Collection Practices Act underwent some changes that took effect in late
2021.
Key updates include:
- Debt collectors can now communicate via email, text messages, and social media DM in addition to postal mail and calls. Limits still applies on contact frequency.
- Collectors must provide an opt-out method for electronic communications.
- The statute of limitations for bringing FDCPA lawsuits increased from one to three years.
The CFPB also released the 2021 Annual Report on the FDCPA showing:
- Complaints about continued attempts to collect expired debts have increased significantly.
- Third-party debt collection law firms were involved in more than
60 percent of debt collection litigation.
- Long-standing problems remain with collectors filing suits without the proper ability to prove debts.
4) Keep records of all correspondence with the debt collectors
Another thing you can do to help keep the debt collectors in check is to keep a record of all your correspondence with them. If you get a letter or an email from a debt collector, put it aside. Keep it all.
When you receive a phone call, take note of the date and time, who called you, what was said, and make notes about the conversation and their attitude toward you.
This is especially important when debt collectors are calling your work or harassing friends & family about money that you supposedly owe. The fact that they are even bothering others should point out how serious (or desperate) these people are about getting paid.
If things escalate in terms of threats and harassment then consult with an attorney for advice on where to go next with the issue. Make sure you keep all your records well organized.
5) Don't ignore calls from debt collectors - they are not going to go away anytime soon, so it's best to deal with them sooner rather than later
Nobody likes getting phone calls from unavailable phone numbers or spam calls, but one good rule is to never ignore phone calls from debt collectors. Ignoring debt collection letters is not a good idea either.
Your options are to accept collectors' offers or try to settle the dispute within two years of getting sued. It's important to know
the minimum amount a debt collection agency will sue you for. They can sue you for much more than you actually owe but cannot collect any more from you than that. Always reply directly to the court where your case has been filed, never to collectors themselves.
6) If you're having trouble paying your bills, contact your creditors immediately instead of waiting until it becomes too late
If you have fallen behind on your bills and find yourself having trouble paying your creditors, you should contact them right away to explain the situation. Explain to them that you're having some temporary financial difficulties and that you will be able to pay them in the future, but that for right now, there's just not enough money coming in.
They may help by giving you a break on your interest rate or lower your payments temporarily until you get back on track.
Check out this helpful article to learn more about
how to deal with debt collectors when you can’t pay them.
7) Be careful about what you say on social media sites like Facebook or Twitter because this information can be used against you in court
Depending on what you say on your social media profiles may or may not be used against you in a lawsuit. Understanding when a debt collector might sue can help you be more cautious about your online presence. For example, evidence can be admitted if the defendant "did not know or should not have known that it was illegal”.
In some cases, social media posts are identical to voicemail messages or emails - a communication made by one party to another ABA Public Company Council argues that the communication ought to be afforded the same level of protection in criminal law as an email or voicemail message would be given; however others disagree and hold it up to scrutiny as just another form of communication sent through text-based mediums like Facebook's Messenger app.
Regardless of how you interpret the law and your rights, let's lay down some ground rules for what you can do to protect yourself online in this digital age.
Limit public access to personal information about yourself The first thing you should do is make sure that your social media profiles are visible only to those who you want to see.
If someone wants to see your Twitter, Facebook, or Google+ accounts, they should receive confirmation from you before being granted access to your full profile.
However, even if you block users from following/viewing your profile(s), there is always the chance of them stalking your social media friends or connections. Always be mindful of what you say and type online.
FAQs
Do Not Sell My Personal Information