How Can Collection Lawsuits Affect Your Life?

Collection lawsuits occur when a collection agent files a claim with the court to start a legal lawsuit against an individual who owes them money for debts. Collection lawsuits are time consuming and costly. Many creditors will choose not to proceed if attempting to collect a debt owed. There are many types of collection lawsuits, but they all deal with some type of debt that is owed.

Some of these collection lawsuits deal with a debtor not paying their credit card bills.

The government has introduced legislation in congress to help people better handle their credit card debt issues. The pandemic of debt-collectives is now a growing problem throughout the nation. The pandemic has been called “the worst thing to happen to credit cards”. Collectors have sued thousands of individuals for failure to pay their debts. These individuals have gone into debt-collective because they have no means of paying their bills.

Collection lawsuits are started by the collection agents of a creditor who feel they have a right to collect monies owed to them by a named debtor.

Once the suit is filed in a civil court, the creditor must prove every element of the claim. They must show proof that the defendant failed to pay their debts, and there are certain elements the court requires the creditor to prove. These elements are called “fault elements”.

There are also seven “exception elements” that collection agencies are not required to prove to start a lawsuit.

The first exception is that the collection agency cannot sue an individual for a preexisting delinquent account. Another exception to the pre-existing account limitation is if the debtor has paid off the account. The third exception to the statute of limitations is, if the creditor and the debtor have entered into a financial agreement. Also, collection agencies are not allowed to sue an individual for an account that was not open when the suit is filed.

A recent pandemic caused many Americans to fall behind on their credit card and other bill payments.

As more Americans became delinquent on their bills, collection agencies became more aggressive in collecting these debts. According to one study, collection lawsuits filed in 2021 increased by over twenty-five percent over 2021. Some consumers were so annoyed by the aggressive tactics of the collection agencies that they filed suits against the companies for violation of their rights under the Fair Debt Collection Practices Act (FDCPA). The FDCPA outlines the rights that consumers have to be treated fairly by collection agencies.

In order to avoid being sued for attempting to collect debts, it is important that you develop a proper payment plan with your creditors.

If possible, work with a company that will help you establish a realistic monthly payment plan that you can afford. Another good idea would be to work with a debt settlement company to help create a repayment plan that is agreeable to both parties. Many collection agencies are willing to settle the debts for a fraction of the original amount owed in exchange for full and final repayment of the outstanding debt at a much lower interest rate. Because of the threat of a lawsuit for late fees, the majority of collection agencies are now willing to settle the debts rather than go through the costly process of going to court.