 |
|
 |
 |
 |
 |
 |
 |
 |
 Credit and Debt Problems with Medical Issues Collection agencies are in business solely to collect money. While many of these agencies have not studied politeness or manners, these agencies are legally able to harass and pressure you for amounts owed. You do have certain rights as a debtor. There are federal and state laws which govern collection agencies, and only after each of these laws is fully analyzed can one make a determination as to the propriety of the actions of a collection agency. Thus, no treatise or study of this area and your rights can give you a completely predictable pattern of conduct which absolutely determines if the collection agency has violated your rights, without such a complete analysis. However, you can obtain a detailed discussion of what rights you have and what limits a collection agency has by referring to the Consumer Law Library section on collection agencies. What if you just ignore a collection agency? Sometimes the agency may decide not to pursue you and the matter is dropped. However, it is likely that the next step will be for a lawyer to file a lawsuit. What if you are sued? You will receive a notice of a lawsuit, called a citation or a summons or a similar form. This should also contain a copy of the actual lawsuit, called a petition, complaint or other similar name. Usually a person will come to your house or your work and deliver these documents to you. There are certain restrictions on how this notice must be given to you. Each state has different rules, but usually, First Class mail is not enough. [Beware, First Class mail may be all you receive, but the lawyer may have already made repeated attempts to personally serve the papers to you at an old address. While you think this mail is not enough, you may be wrong.] Collection agencies are experienced, however, and they know that if they sue you in Small Claims Court, you can defend yourself without having to pay an attorney to help you. So a common practice is often to file a lawsuit in a civil court, even for amounts as small as under $100. While this is not too pleasing to the judges, it is common practice, and this will likely be the result if you do not pay or work out a payment agreement. If you are served with a lawsuit, what can you do? First, you should review the dollar amount for which you are being sued. Often a typographical error might occur and before it is realized, the suit can be settled and you will be released from further liability. If the amount is correct, and it is under $200 you may wish to settle with the creditor. If it is between $200 and the jurisdictional limit of the Small Claims Court, you might consider defending yourself, although you need a reasonable defense to why you haven't paid. ["I can't afford it" does not usually work.] If the amount is over $200, but is filed in a court of jurisdiction instead of Small Claims, you have an option. You can represent yourself, or you can retain a lawyer. While everyone wants to retain an attorney, it is often not feasible to hire an attorney to defend you, because this may cost more than the entire debt, often by two or three times. Carefully consider the most you will lose before agreeing to hire an attorney. It makes no sense to have two creditors where there was only one before. If the amount is over $5,000 you may not wish to represent yourself, and you should discuss your situation with a Plan Attorney. If you are served with a lawsuit, you may be inclined to ignore the suit. This again can often be the worst possible situation. If you receive a summons or complaint and you do not respond in the time given by the law to file a response [and in the proper form required for the response] you default. This means a creditor can enter a judgment against you for the entire amount of the lawsuit, plus interest, plus attorney's fees and other costs and expenses. Before this judgment is awarded, the creditor must usually present basic evidence of the debt and justify all of the calculations and expenses. If you do not show up for court, the courts will have only one side of the case. Thus, even a typographical error changing $1,000 to $5,000 might result in a $5,000 judgment being entered against you when you owe nowhere near that amount to the collection agency. You should not ignore a lawsuit. Making this area more ominous is that in many states, but not all, creditors can garnish your wages. Thus, the next you may hear about this lawsuit you ignored is when your paycheck is missing funds which your employer was legally required to withhold by law. The section on credits and debts can show you how to obtain information which may affect a possible garnishment of your wages, and includes such topics as (1) if your wages are subject to garnishment; and (2) if a garnishment can be avoided. This entire area of credit and debts is serious enough to warrant a lengthy discussion. See the section on debts and credit for more information.
|
