Many people fall behind on their bills at one time or another. When you fall six months or more behind on paying a debt, you could potentially be sued by the creditor in order to collect that debt. In some instances, creditors hire law firms to contact debtors to try to collect funds they are owed. If you have been contacted by a law firm regarding a debt you owe, read the information below to help you in your next steps.
People often think that ignoring a debt problem will make it go away. In reality, however, this could not be further from the truth. When you respond to debt collectors it shows that you could be willing to work with them and may buy you some time before you are sued. Additionally, if you believe the debt to have already been paid or not even yours, it is essential to respond and provide documentation to that effect.
Request a Settlement
If the debt you have been contacted about is yours, you can ask the collector to enter into a settlement agreement with you. Such an arrangement would likely entail monthly payments to pay off a percentage of the debt owed. A debt collection firm could settle for as little as fifty percent of the debt owed but would more likely require around eighty percent of that debt to be paid.
When debts begin to pile up and you cannot afford to pay them, it could be time to consider filing for bankruptcy. This would keep you from being sued for your debts. Although there is a negative stigma associated with bankruptcy, it can be beneficial if you are drowning in debt.
Wait it Out
In the event that you have not responded to a collector’s attempts to settle a debt, you can always wait to receive notification that you are being sued. This may be beneficial in the event that you are saving up or borrowing money to pay for the debt but haven’t been able to afford to do so previously. You can likely still contact the debt collector to make a settlement once you’ve been notified of a lawsuit. You may also want to wait to respond to a collections notice if you believe the collector violated the Fair Debt Collection Practices Act.
Being in debt can be scary and overwhelming. Contacting a bankruptcy lawyer from a firm like The Law Offices of Ronald I. Chorches can provide you with legal advice so that you understand your debt settlement options.