Frequently Asked Questions: For Consumers Facing Debt Collection
Help, I’ve Been Sued by a Debt Collector! What Should I Do?
The highly profitable debt collection industry is dedicated to buying (typically for pennies on the dollar) and collecting on consumer debts like credit card accounts, club or HOA membership fees, or even outstanding parking tickets or court fees. If you are sued by a debt collector claiming the right to collect on a debt you owe, you may have a defense against the case. Defenses can include, for example, lack of proper service of process, mistaken identity, lack of standing to sue you, time-barred debts, or that the claimed amount is incorrect. You may also have additional defenses or even claims of your own against the debt collector if your debt collector violates laws like the Fair Debt Collection Practices Act or related state laws.
Unfortunately, many consumers fail to timely respond to a debt-collection lawsuit, leading to entry of a default judgment against them. Once it is entered, a default judgment can allow the debt collector to garnish the defendant’s wages or bank account, or collect on the judgment by seizing other assets. It is possible to ask the court to set aside a default judgment under certain circumstances, but for best results, the defendant should appear in the case and file an answer to the complaint by the deadline listed in the summons.
To prevent entry of a default judgment and ensure you have the best chance of protecting your rights, you should discuss the situation with an attorney promptly after you learn of a debt-collection lawsuit filed against you.
I Haven’t Heard about any Lawsuit against Me, but a Debt Collector Claims I Owe Them Money.
If a debt collector contacts you, before you say the debt is yours (which could affect your rights in defending against the claim), you have the right to review validation of the debt. You should obtain the name and mailing address of the debt collector if you are contacted by telephone and keep this information handy.
Debt collectors and creditors can make mistakes, so it’s important to verify any information about a debt you supposedly owe. By law, debt collectors are required to give you validation of the debt either in your initial communication with them, or within five days of their first contact with you about the account (unless the debt has already been paid). These rules come from the federal Fair Debt Collection Practices Act. Validation has to include the amount owed, name of the creditor, and three statements— that: 1) unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; 2) if the consumer notifies the debt collector in writing within thirty days that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and 3) that if the consumer requests it in writing within 30 days, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor. The validation letter gives the consumer a chance to dispute the claimed debt, if the debt collector’s information is wholly or partially inaccurate.
If you don’t receive validation of the debt during or shortly after your first contact with the debt collector, you may send them a written request for validation. If you have questions about whether a debt collector has acted inappropriately in attempting to collect a debt, you should discuss the situation promptly with an attorney familiar with consumer protection laws. An attorney may be able to help you dispute the validity of a debt if you act promptly, within the 30-day period after receiving a validation letter.
How Do I Know if a Debt Collector Has Violated the Law?
Consumer protection laws governing debt collection can be complex to understand and apply. You should discuss your situation with an attorney familiar with consumer protection laws to understand your rights and options for addressing legal claims against debt collectors who violate your rights.
Some of the key rules applicable to debt collectors are listed in the Fair Debt Collection Practices Act and Washington statutes governing debt collection agencies. For example, they may not:
- Collect any amount unless authorized by law and/or by agreement (for example, in a credit card agreement you signed);
- In most circumstances, contact third parties like your friends or family members about your alleged debt, unless you authorize such communications;
- Engage in harassment or abuse, make false or misleading misrepresentations, or use unfair or unconscionable means to collect a debt.
An attorney can help you understand how the laws apply to the specific facts of your situation.
Will It Cost Me to Discuss My Debt Defense Case with an Attorney?
Generally, attorneys at our law firm offer potential clients a free initial consultation. If you are facing a lawsuit by a debt collector, we may be able to offer you representation for your defense. And if your rights were violated by a debt collector, we may be able to offer you a contingent fee representation for any claims you have under consumer protection laws.
Because a consumer who wins a case under the Fair Debt Collection Practices Act and related law is generally entitled to receive their attorney fees from the losing party, our firm can represent clients in those cases without having to charge you up front for our attorney’s fee. Please contact us if you would like to discuss your defense in a debt collection case, or your rights as a consumer in the debt collection process.