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Debtors have options in responding to collections actions

On Behalf of | Jul 24, 2019 | Bankruptcy, Firm News

The Consumer Financial Protection Bureau reports that more than 70 million people nationwide have at one time or another had to deal with debt collectors. Around one-quarter of people said they felt threatened by the collection agency during their interactions. In such situations, it can seem like the creditors have all the power, but there are things people in Connecticut can do to respond to debt collection actions.

One of the first things is to respond. If the debtor fails to respond, the collections agency may be able to get a default judgment, which may allow them to garnish the person’s wages or reach into bank accounts to secure funds. When filing a response, called an answer, it is important not to admit liability for the debt. The answer should be filed with the appropriate clerk of court. It is a good idea to get a stamped copy of the answer from the clerk and send the copy to the debt collector.

In some cases, the debt collector may not have the right to sue. Debtors may be able to challenge the collection agency’s right to sue. They may be forced to provide the signed credit agreement and documentation that the paperwork is all accurate and comes from the original creditor.

Filing for bankruptcy protection establishes an automatic stay of all collection actions. People in Connecticut who are struggling to pay down debts might consider a Chapter 7 or Chapter 13 filing once they are served with a collections lawsuit. An attorney might be able to help in such cases by reviewing the facts and suggesting the proper form of bankruptcy or another strategy to reduce or eliminate debts. An attorney might be able to negotiate settlement of debts for less than the amount owed or argue on the client’s behalf during official hearings. Contact us today to talk to an attorney.