"The Lord is with you , O valiant warrior."
I receive so many requests for prayers from individuals who are undergoing financial hardship. This of course includes being taunted by debt collectors. Last week I spoke of how to deal with creditors when they first contact you. This week offers advice if you happen to be sued.
It's nice to think when you default on a bill that it will be magically written off by larger companies. After all, who would want to attempt to take a small claims debt to court? The expenses alone incurred from a party who may never be able to compensate seems ludicrous. But, from time to time, small debt notes are bought out by larger firms who higher collection agencies that house lawyers in the back room. These types of companies may stop at nothing to receive collateral.
One avenue is to secure a court order. Judgments give debt collectors much stronger tools to collect the debt from you. Depending on your state’s laws, the creditor may be able to:
- Garnish your wages
- Place a lien against your property
- Move to freeze all or part of the funds in your bank account.
In many states, lawyers who are suing you will provide notice of the suit to you by certified mail.
Warning: You won’t be able to stop the lawsuit by refusing to accept the letter or by refusing to sign the receipt that shows you got the letter. By doing these things you’ll essentially be ignoring the lawsuit.
If you ignore a court action, it's likely that a judgment will be entered against you for the amount the creditor or debt collector claims you owe. Often the court also will award additional fees against you to cover collections costs or fees for attorneys
When you answer the lawsuit, the debt collector will have to produce evidence that proves to the court you owe the debt. Make sure you ask for this.
Warning: You also may lose the ability to dispute that you owe the debt if a court issues a judgment against you.
A judgment is a court order. Only the court can change it. It's very difficult to get a judgment changed or set aside once the case is over. You have a much better chance to fight a collection in court if you defend the case than if you wait until a judgment is entered against you.
If you have a job, you can expect that collectors will try to get a piece of your paycheck. To gain access to this money, they'll work with your employer, not you. In wage garnishment, a portion of your wages will be deducted directly from your paycheck.
"Although not all states allow wage garnishment, this is typically the first thing that collectors are going to try since it's the most dependable way for them to get paid," says Gerri Detweiler, co-author of "Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights." At most, collectors can take 25 percent of disposable earnings after Social Security and taxes.
If debt collectors discover that you have a checking account or savings account, they can serve the bank with a bank levy, and you'll receive notice that the bank has frozen funds on your account, says Labrador. A bank levy is when a bank account is frozen so you cannot access it while creditors take the funds that are owed to them."Then you'll have 21 days to tell them why it's not the lender's money. Otherwise, it will be pulled from your account to satisfy the judgment," she says.
With an attachment, collectors can take some types of personal property, such as your car or house, to sell to pay off your debt. But there are a number of restrictions that govern attachments. They usually can't take your car if it's the only one you have, and they can't take the home that you live in. But they can take second homes, second cars and other valuable property such as boats or land, says Detweiler.
Either way, when you are served take time and consult an attorney in your state to learn more about your rights if you are sued on a debt. Some attorneys may also offer free services, or charge a reduced fee. You may wish to find an attorney who has experience in the Fair Debt Collection Practices Act and debt collection issues.
Remember God sees you as a champion. You may not be able to embrace that concept at the moment, but this doesn't change God's view one bit. You may feel unqualified, insecure, or overwhelmed by it all - but pray for wisdom and see yourself as a victor!