Credit Card FAQ

Can a Collection Agency Sue You?

13 April 2011 by CreditCardsCo™

With unemployment on the rise and the economy steadily getting slower, many people are finding it more and more difficult to pay their bills. Often, we have to choose between putting food on the table and paying off a credit card. It's obvious which one any of us would choose.

Creditors are not often understanding of all the factors involved in keeping us from paying our bills. After all, they need to get paid too in order to keep things running smoothly on their end. So, you'll need to know what lengths they'll go to in order to receive that payment.

Honestly, it's best to try to work something out with the credit card company before they decide to send it to collections. Ignoring it will just end up causing you more problems later. Sometimes just calling them and letting them know what you can pay will help, but often, they'll just send it to a collection agency anyway, if you're not making their minimums. But, it's always worth a shot to try to get them to work with you.

Once a credit account has been sent to collections, you'll start getting the angry, harassing phone calls. One of the things you'll eventually hear is that they are planning to sue you. You may be wondering if this is possible. While it's not possible to be sent to jail for not paying bills, it is possible to be sued by a credit company. However, most of the time they threaten this, they aren't planning to follow through.

Collection agencies often use whatever scare tactics they can think of to get people to pay. Knowing your rights and what they can and can't do will help you to deal with them. Most collection agencies won't sue you for a debt that's less than $1500. And it's still rare for them to do so when the debt is more. There are a lot of hoops they have to jump through in order to take you to court. Most don't want to go through that much effort to get the bill paid.

However, it is possible and has happened before that an agency will sue a consumer. If they win, they can put a lien on your home or even garnish your wages. If you have a lien placed on your home or other assets, you'll be unable to close a loan or sell the home without paying them the money they are owed. This will be done directly by the escrow company and will end up being added to the fees you owe.

If a collection agency is being unreasonable with your attempts to work with them, and continues to threaten to sue you, you may just want to call their bluff. Because most won't accept payment plans, they'll just keep hounding you to pay the entire amount at once. This is because they are trying to scare you into borrowing the money from a family member, or otherwise coming up with it, so they can close out the account. They don't want to settle for a payment plan when they might get more. Sometimes calling them on their threat because you simply can't come up with the money, will help them to become more reasonable.

While it is best to try to find ways to get your debts paid off, sometimes it's impossible. Be sure you know and understand what collection agencies are actually capable of doing so you can sift through their threats. Also, look up laws in your state about how long they have to sue you. There is a time limit. Just being informed will give you more peace of mind when dealing with these people.

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