When Will a Debt Collector Sue You?

How a Debt Collector Can Sue You

Debt settlement is not easy, even more so if a debt collection agency calls you non-stop, asking you to repay what you owe. As the term suggests, unfair collection practices are unfair, harassing, deceptive, or unlawful methods that debt collectors use to ask for payment. Here, a hands-on Portland debt defense lawyer can help you take legal action and decide if suing the party at fault is the best option. 

Borrowed money that has not been repaid could lead to a slew of complicated events. It is not uncommon for a debtor to be harassed by a debt collection company, which should not be the case. Debt collection law is regulated by statutes in other areas of law, and these unfair practices often involve identity theft or false credit reporting. Seeking legal assistance early on can help you deal with lawsuits appropriately.

From Receiving Collection Calls to Getting Sued

Collecting debt is a complicated process, with specific actions allowed and prohibited under guidelines set by the Consumer Financial Protection Bureau. Many lenders will make collection attempts (such as phone calls, past due invoices, or even a threatening letter) once a debt is 30 days past due. However, after more or less 180 days, they will likely turn the account over to an agency offering debt collecting services.

Most of the time, a debt collection company will sue for unpaid debt when it believes it has a good chance of successfully collecting repayment. Common factors include the agency’s ability to locate the borrower, whether there are assets that have positive equity (such as real property), the amount of the debt owed, the expected collection amount, state law regarding wage garnishment, the age of the debt, and the statutes of limitations.

Dealing with Debt Collectors Threatening to Sue

Debt collection companies are notorious for attempting to collect debts from the wrong people. Partly because debts are often sold by the original creditor to a third party and possibly resold again, a debt collector’s information will likely be incomplete. As such, it is essential to be extra careful when you talk with debt collectors, especially if they threaten to file a lawsuit. Keep a record of all phone calls, including the customer representative’s name, what they said, and even the time and date of the call. 

Always keep in mind that giving them your bank account and other payment information or even simply promising to make a payment may be taken as acceptance of the debt. They have a legal obligation to give you information about the debt they attempt to collect, so asking for details can help you determine if the debt is past its statute of limitations. These pieces of information will be helpful if their threat to sue is a violation of the FDCPA.

The Statute of Limitations on Debt

It is not uncommon for a debtor to, out of nowhere, receive a call from a creditor or collector. What not a lot of debtors are aware of, however, are state laws indicating the time limit for a particular debt to be barred. If you ever get a call from a debt collection agency asking you to repay a debt you no longer recognize, refer to your records and the debt validation letter to clarify any discrepancy. Doing so will help you determine if you should challenge the debt.

In general, debt collectors can still ask you to pay back what you owe even after the statute of limitations expires. As long as they are not violating relevant debt collection laws, they are generally ‘allowed’ to ask for repayment, either by calling you or sending you letters. However, if a debt collector is filing or is threatening to file a lawsuit for a time-barred debt, they may be violating the Fair Debt Collection Practices Act or FDCPA.

In certain states, the statute of limitations is counted after the most recent payment was made, even if it was made during collection. In other places, it automatically begins once you fail to make a required payment or when the loan becomes delinquent. It is essential to remember that even if the statute of limitations has already expired, a court may still award a judgment against you if this statute is not properly raised as a debt defense.

The Debt Collection Process and Seeking Legal Help

Naturally, a creditor will be asking a debtor to pay off what the latter owed. Creditors would likely call you, harass you, or send a letter demanding repayment, especially if payments are past due dates. However, it is essential to make sure that as they ask you to pay back, they do not violate any relevant statute on collecting debts. If you believe that your consumer rights have been violated, seek legal advice from seasoned Portland debt defense attorneys. They can provide reliable legal representation, especially if there is a need to sue and bring a specific lender or debt collection agency to court.

You do not have to deal with unfair collectors or debt collection agencies alone. If you have questions about unlawful debt collection practices, make sure that your legal rights are protected. Our team at Northwest Debt Defense Law Firm has extensive experience in providing debt relief. Contact our Portland debt defense law firm today.