The Consumer Financial Protection Bureau reports that over 70 million people in Oregon and the rest of the United States have had interactions with debt collectors. During these interactions, 25% of the debtors have felt threatened. However, people should learn about their rights and take certain actions when they are sued for a debt.
It is important that debtors respond to a debt lawsuit or claim. Failing to respond means that the collection agency will receive a default judgment against the person. Depending on the state in which the debtor lives, the collection agency may be able to garnish that person’s wages or seize funds in his or her bank accounts.
When the collection agency or creditor files a lawsuit, responding by letter or phone to the plaintiff is insufficient. It will be necessary to respond by using legal briefs. When responding with legal briefs, it is important that debtors do not admit any liability for the debt as it compels the creditor to provide proof of the debt and the debtors’ responsibility for it.
People may also challenge the debt collector’s legal right to file a lawsuit. Debts are often sold multiple times, so the debt collector that owns the debt and has filed a lawsuit has to submit proof that they have the legal right to do so. The debt collector is required to submit a copy of the credit agreement that was signed by the debtor and documentation that demonstrates the paperwork originated with the original creditor and is accurate.
An attorney may advise clients about how bankruptcy may be used to resolve their debts and stop harassment and lawsuits from debt collectors. A lawyer may explain which types of debt can be discharged and advise clients about the type of bankruptcy for which they may qualify.