Can Collection Agencies File lawsuit?

A collection lawsuit occurs when a creditor files a petition with the court to begin a lawsuit against a consumer who owes them money. Collection lawsuits can be expensive and time-consuming. However, the creditor cannot take control of your wages unless they have obtained a court judgment.

Why do collection agencies file lawsuits against you?

As I mentioned yesterday, collection agencies that file a lawsuit against you do so in the hope that you won’t respond and the company will subsequently win a default judgment against you. Collection agencies rarely have complete documentation proving that you owe the debt they claim you owe. This is because creditors sell debts in batches.

Can a lack of documentation hurt a collection agency?

Compiling and including extensive data on each delinquent account requires more time and effort than the original creditor wants to provide. After all, its already taken its tax break on the debt. This lack of supporting documentation usually doesn’t hurt the collection agency very much.

Can a collection agency Sue you for an outstanding balance?

After all, it’s not the original company you created the debt with. Once you default on the original credit agreement and the business sells the debt to a collection agency, that agency has the right to collect on that debt — assuming the collector operates legally. A collection agency may even be able to sue you for an outstanding balance.

Is it illegal for a debt collector to use unfair practices?

The FTC enforces the Fair Debt Collection Practices Act (FDCPA), which makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they collect debts. This opens in a new window.

Can a collection agency Sue you for debt that is no longer enforceable?

If you’re sued for a debt that’s outside the statute of limitations, you may be able to have the lawsuit dismissed if you have proof that the debt is no longer enforceable. However, failing show up in court gives the collection agency a chance to win a default judgment against you. This means the court has ordered you to pay the debt.

Can a third party collection agency Sue You?

Thomas Brock is a well-rounded financial professional, with over 20 years of experience in investments, corporate finance, and accounting. Many people think they have no obligation to pay a third-party collection agency. After all, it’s not the original company you created the debt with.

Who is person who turned claim over to debt collection agency?

The person who turned the claim over to the debt collection agency is woman who lived with me. I responded to the collection agency as required asking for proof and denying that any debt is mine. She claims I owe her money for work she did for me. We had no contract nor understand that I would pay her for some paper work she chose to do.

When do you have to pay a collection agency?

Many people think they have no obligation to pay a third-party collection agency. After all, it’s not the original company you created the debt with. Once you default on the original credit agreement and the business sells the debt to a collection agency, that agency has the right to collect on that debt — assuming the collector operates legally.