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Handling a lawsuit by a debt collector

People in the District of Columbia may face aggressive collection activities at times, including lawsuits. While some creditors may have legitimate reasons for legal action, others may make threats about such action as part of an effort to elicit payment. It may be difficult to discern whether a notice of legal action is valid or not, making it important to inspect any claims of legal activity to ensure that a valid lawsuit is not ignored.

If a debtor fails to respond to a lawsuit or attend proceedings, a judgment might be rendered in that individual's absence. Such a judgment may be adverse although creditors must prove that they have the right to collect the debt in question and that the debt is valid. Any complaints about the debt or its validity should be issued prior to a judgment being made. If a court issues a judgment on behalf of a debt collector, that individual or agency might use more aggressive tactics such as wage garnishment or placing a lien against the debtor's property.

If debt collection activities have reached an unmanageable level due to severe financial situations for an individual, it might be helpful to head off such collection activities by seeking assistance from a credit counseling agency or bankruptcy attorney. A counseling service might work as an intermediary with creditors to establish a repayment plan that allows for a more manageable approach to dealing with valid debts.

Individuals who do not have the resources to settle their consumer debt or to negotiate a repayment plan that satisfies all parties might find that bankruptcy is the best option for getting a fresh start. In such a case, it is important to provide a comprehensive listing of all debts to the attorney assisting in the case to ensure that all outstanding debts are resolved through either Chapter 7 or Chapter 13.

Source: Consumer Financial Protection Bureau, "What should I do if a creditor or debt collector sues me?", November 09, 2014

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