If you've ever received a phone call or letter from a debt collection agency but lack the ability to pay that debt, you may have wondered just how far these predators can go in their attempts to get your money. Can they take you to court?
The short answer is yes, but that doesn't mean they will. If you've ever received a letter from a debt collection agency, you already know they are quite adept at threatening to take action. The good news is that you have considerable control over whether their actions are successful.
To thwart a creditor's attempts to take you to court, you need to be proactive. Trying to stay under the radar of a collector will only result in further damaging action on their part. Instead, speak up and defend yourself, beginning with the summons and complaint, if you receive one. Even filing a quick response stating that you aren't liable for the debt will force the collection agency or other plaintiff to do more work to prove you owe the debt, and this is often enough for the agency to back off completely or at least negotiate a settlement for less than what you owe.
Also bear in mind that collection agencies tend to buy debts from credit card companies or other debt collectors. If you're being sued, demanding proof of the debt through a paper trail can stop a collector in its tracks. These paper trails are often missing or inaccurate, and the agency won't have a case without adequate proof of your debt.
Another point to consider is the statute of limitations on your debt. In Tennessee, creditors have just six years to sue you. This doesn't mean you aren't liable for it after that time, however. You may still be subject to those nasty phone calls and letters, and the statute date can reset if you spend money on the account.
Finally, when a creditor tries to take legal action, oftentimes your best bet is to do the same. A skilled bankruptcy attorney can not only help you fight back, but provide additional options for managing your debt -- especially when you aren't able to pay it. Filing for bankruptcy doesn't just prevent an impending lawsuit; it can also stop the harassment, reduce financial stress and provide a long-term solution to your debt.