Can a Debt Collector Sue You?

Is it possible for a debt collector to sue you?

It is crucial that you reply to a debt collector’s notification right after you receive it, regardless of whether you owe the money. If you don’t, the collector might try to get the money, report you to credit reporting agencies, and even file a lawsuit against you.

Do not disregard a summons sent to you by a debt collector. If you ignore it, the collector might obtain a default judgment against you. This means the court will rule in favor of the collector since you chose not to appear in court in self-defense. The debt collector may then deduct money from your wages or bank accounts by garnishing your income and accounts. In order to defend yourself in court, be sure that you answer by the deadline indicated in the court documents. You might wish to speak with an attorney if you find yourself sued.

You have legal protection against dishonest, unjust, or abusive debt collection tactics. The following details some typical problems with debt collection:

• Contesting a Debt: What to do if a collector gets in touch with you over a debt that you have already paid off, that does not belong to you, or that is for an incorrect amount.
• Debt collectors are often prohibited from engaging in certain behaviors, such as call restrictions and harassment.
• Debt collectors are subject to specific regulations regarding when and how they can contact you over your debt, including your employer and other individuals.
• Interest and Additional Fees: Details regarding interest and other costs that debt collectors might apply to your account.
• Credit Reporting: Information that bill collectors can provide credit reporting agencies.
• Old (Time-Barred) Debts: Although you may not be able to sue debt collectors for debts that are too old or past due, they may nevertheless attempt to collect from you.

Contesting a Debt

If a debt collector gets in touch with you over a debt you don’t owe, a debt that is incorrectly assessed, a debt you have previously paid off, or something else entirely, you should get back to them as quickly as you can. Ensure you contest the debt by sending a written response. If you fail to do this, the debt collector might pursue collection efforts further and possibly file a lawsuit against you in order to get payment.

When a debt collector gets in touch with you, they are required to issue you a written notice, known as a “validation notice,” within five days that includes the following information: (1) the amount they believe you owe; (2) the creditor’s name; and (3) written instructions on how to contest the debt. Until you receive this validation notification, never provide financial or personal information to a debt collector—it could be a hoax.

Within thirty days of the debt collector’s initial contact, be sure you contest the debt in writing. If you comply, the debt collector is required to cease efforts to secure the money until it can provide you with proof of the debt. A debt should be contested in writing if:

• The debt is not yours to pay;
• The debt has already been paid;
• You’d like further details regarding the debt; or
• You desire a reduction in or an end to the debt collector’s communication with you.

If the debt collector is attempting to collect money that you have already paid, explain this in the letter and provide copies (not originals) of any canceled checks, receipts, or other documentation that demonstrates the payment of the bill. Keep a copy of the disagreement letter and return receipt that you send via certified mail.

Call Limitations and Mistreatment

Debt collectors are unable to mistreat or harass you. They can’t use profanity, make false threats with actions they do not intend to take, threaten to injure your property or yourself, or threaten you with unlawful acts. They are also not allowed to call you repeatedly in an attempt to irritate or harass you.

Debt collectors are not allowed to make up or misrepresent information. They cannot, for instance, misrepresent the amount of debt they are trying to secure or the nature of the collection itself. Nor can they use language or symbols in their correspondence with you to fraudulently identify it as coming from a court, legal office, or government body.

It is not permissible for debt collectors to contact you at odd or inconvenient hours. They might call in general between 8 in the morning and 9 at night, however if those times are inconvenient for you, you can ask them to call at another time.

You may get letters or notices from debt collectors, but the contents of the envelopes cannot include details about your debt or anything that might be embarrassing for you.

You have the option to impose additional restrictions, such as limiting contact from debt collectors to mail or through your lawyer. Make sure you submit a duplicate of the letter and receipt, send your request in writing, and send it via certified mail with a return receipt. You can also request that a debt collector completely cease communicating with you. The debt collector will only get in touch with you to verify that it will stop calling you and to let you know that it might file a lawsuit or take other legal action against you if you choose to do this. It is important to keep in mind that even if you request that a debt collector cease all communication, they may still file a lawsuit against you and disclose your debt to credit reporting agencies, which could potentially damage your credit.

Debt Collector Reaching Out to Your Company or Other Parties

1. Employers

Your employer may get calls from debt collectors, but only:

• To confirm that you are employed;
• To find out where you are;
• To garnish your salary, which entails deducting money from your paycheck, but only following a lawsuit and court ruling against you;
• If it’s a medical debt, to inquire about your health insurance; or
• It was agreed in writing by you or your lawyer that the debt collector might get in touch with your place of work.

A debt collector could give your company a call once to confirm that you are employed. To find out whether you have health insurance, medical professionals and their representatives may also give your employer a call. If not, your employer will receive a written communication from the debt collector. The collector may phone or make other contact with your employer if it does not hear back from you in writing after 15 days.

2. Other Individuals

Debt collectors are typically not allowed to speak with your neighbors, family, or other individuals regarding your debt unless:

• The debt collector is attempting to locate you by doing this;
• The debt collector receives permission from a court to do this;
• If it is reasonably required to get in touch with additional parties in order to carry out the judgment following a debt collector’s lawsuit and court-issued judgment against you; or
• The debt collector may get in touch with other people, as long as you or your lawyer agreed in writing.

A debt collector may speak with your partner. If you are under the age of eighteen or live with your parents, a debt collector may get in touch with them. A debt collector may also discuss your debt with your lawyer and, if permitted by law, the credit reporting agencies Experian, Equifax, and TransUnion.

3. Interest as well as other fees

Debt collectors can only obtain fees, interest, charges, and other costs related to your debt if they are specifically approved by the contract that created the obligation or if they are otherwise allowed by law. The debt collector is required to disclose the amount and reason for any charges you make. To accomplish this, write the debt collector a letter requesting a written explanation.

To determine if the debt collector is asking for more than permitted legally or by the arrangement that created the debt, you can also speak with an attorney.

4. Reporting on Credit

Debt collectors have the option to submit your debt to credit reporting agencies, which compile credit reports that lenders review before extending credit. Debt collectors are not, however, permitted to report erroneous information on your debt. A debt collector must notify any credit reporting company to which it has reported your debt that you are disputing it if you do so in writing.

5. Old Debts (Time-Barred)

Even if they can’t legally sue you to collect past-due payments, debt collectors may nonetheless make attempts to collect those amounts. There is often a four-year statute of limitations in California for suing someone to collect money that was agreed upon in writing. It can be confusing to know when the time limit begins to run or can be reset (for instance, if you pay off part of the debt, it might start the clock running again). Even after the statute of limitations has passed, a debt collector can still contact you through other means, such as collection notices, phone calls, or credit reporting. You should consider speaking with an attorney if you believe your debt has expired.

Debtors Taking Funds from Your Bank Account, Benefits, or Wages

Debt collectors can only garnish your wages, bank account, or benefits (a process known as wage garnishment) if they have already filed a lawsuit against you and won a judgment against you for the debt you owe. There are legal restrictions on the amount of money that debt collectors can take from your bank accounts and earnings. In general, federal payments like social security and veterans’ benefits are not garnishable. See the FTC’s “Garnishing Federal Benefits” for additional details on garnishment and what to do if your benefits or bank account are seized.

Don’t disregard a summons forwarded to you by a debt collector suing you. If you do, the collector might be able to garnish your income and bank account and obtain a default judgment against you, meaning the court will rule in the collector’s favor because you chose not to defend yourself. If a debt collector files a lawsuit against you, you might wish to speak with an attorney about your options.

How to File a Complaint

You can file a complaint with the Attorney General’s Office if you think a debt collector is breaking the law. The Office investigates misbehavior through complaints. However, it is unable to offer individuals legal counsel or help.

You can file a complaint with the FTC as well. The federal Fair Debt Collection Practices Act forbids unfair, abusive, or misleading debt collection practices.

Another option is to file a complaint with the CFPB, which will forward it to the business and attempt to get back to you with a response.