When you fall behind on paying your bills the creditors start calling. Collection calls are stressful―and sometimes collection calls are incessant or aggressive. Know that you have rights when it comes to debt collection!
Third party debt collectors (collectors who are either hired to collect a debt, or who buy debts) are bound by the Fair Debt Collection Practices Act (FDCPA). The FDCPA protects consumers against abusive debt collection practices.
Can My Creditors Threaten to Sue Me?
Possibly.
Your original creditor can threaten to sue you. However, if they hire a debt collection agency to collect on their behalf, the collection agency must comply with the FDCPA.
A debt collection agency may be legally allowed to threaten to sue you.
Federal Law Against Making False or Misleading Representations
Under the FDCPA, “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. … the following conduct is a violation of this section:
(5)The threat to take any action that cannot legally be taken or that is not intended to be taken.” 15 U.S.C. § 1692(e)(5).
Therefore, a debt collector cannot threaten to sue you unless they actually intend to sue you if you do not pay the debt. It would be a violation of the FDCPA for a creditor to threaten to sue you if it does not actually intend to bring suit against you.
Also, a debt collector may only threaten to take action that it can legally take. If it cannot legally bring a lawsuit against you, perhaps because the statute of limitations has run, then it is precluded from threatening to sue you.
Under the FDCPA, debt collectors are also prohibited from saying or implying that the nonpayment of any debt will result in arrest, imprisonment, seizure of property, or garnishment “unless such action is lawful and the debt collector or creditor intends to take such action.” 15 U.S.C. § 1692(e)(4). Again, a debt collector cannot threaten to take a collection action that it doesn’t actually intend to take.
What if My Creditor Sues Me?
Once a creditor sues you they can get a judgment from the court. With a judgment, they have the right to take powerful collection actions against you, including garnishing your wages, levying your bank accounts, or placing a lien on your property. A judgment creditor can literally take money from your paycheck or directly out of your bank account.
If you are served with a lawsuit for unpaid debts (breach of contract/the agreement to pay), it is critical that you face it head-on. Read our article Options If You Have Been Sued By A Creditor to learn more.
Can Bankruptcy End the Lawsuit?
Filing for bankruptcy would put an immediate stop to the lawsuit. So long as your bankruptcy is successful, the lawsuit ends there and you will no longer be liable to pay back the creditor who sued you and other debts would be erased.
Contact us for a free consultation. Together we’ll explore how bankruptcy can help you eliminate lawsuits and erase debts.
Find out more about Bankruptcy in our guide: All About Bankruptcy
We proudly serve the people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.
