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When Will a Debt Collector Sue?

When Will a Debt Collector Sue?

Is a debt collector threatening to sue or are you concerned that they will? Debt collectors may call or send you collection letters for weeks or even months before filing a lawsuit, may file one right away, or never file one at all; there are many factors involved in a debt collectors decision to sue. So when will a debt collector sue you? Maybe never.

Main Factors Debt Collectors Consider Before Suing

Debt collectors will consider four main factors before suing to collect on a debt:

  • The age of the debt
  • Their ability to locate the debtor
  • The amount of the debt
  • The debtors ability to pay the debt

While this is not a complete list of what a debt collector may consider before suing and there may be many other considerations, you can begin to judge your chances of a lawsuit being filed based on these factors.

            Age of the Debt

All states have a statute of limitations on debt collection which limits the amount of time a creditor or debt collector has to sue to collect on a debt. For more information about time-barred debt see When is a Debt Considered Time Barred?

Ability to Locate the Debtor

The first thing any Plaintiff must be able to do before filing a lawsuit is locate the Defendant. When a lawsuit is filed, a Plaintiff must properly serve the Defendant a copy of the Complaint and Summons or a Notice of Lawsuit. If a Plaintiff does not have a current address for a Defendant or know where they work, they may not be able to properly serve them, and filing the suit could be a waste of time and money.

Amount of the Debt

If a Plaintiff can locate the Defendant, the next thing they will consider when deciding whether to sue is how much they may collect as a result of a lawsuit. If the amount is fairly low after taking into account the amount of the current debt, court costs, attorney fees, and interest, a debt collector may decide that suing is not worth the risk.

            Ability to Pay the Debt

Once a debt collector has decided that it can locate the debtor and the amount of the debt makes a lawsuit worthwhile, it will then determine if the debtor has any ability to pay the debt. Debtors collecting pension or federal benefits who own no real property may not be able to pay the debt or have any garnishable wages to apply to a judgment and therefore are likely not to be sued.

Other Factors Debt Collectors Will Consider Before Suing

Other factors debt collectors will consider being filing a lawsuit include the original creditor's wishes and the strength of the case against the debtor. Many smaller companies may not want to pay the expenses of a lawsuit and only hire a collection agency to attempt to collect the debt in any other way possible. A debt collector may also decide not to sue if the original creditor did not provide it with any proof of the original debt, such as a contract or other documentation proving that a service was provided to the debtor and the debtor has not paid for that service.

How Long Will it Take for a Debt Collector to Sue?

Most creditors will begin their own collection attempts after a debt is 30 days past due. Oftentimes these attempts, which may include past due invoices, some phone calls and a threatening letter or two, will continue until the account is approximately 180 days past due, at which time it will then turn the account over to a collection agency, or debt collector. The debt collector will generally attempt to collect the debt for several weeks or even several months before going to the time and expense of filing a lawsuit. The collector may threaten to sue during its collection attempts, but this does not mean that it will. Many debt collectors use the threat of a lawsuit to coerce a consumer into paying the debt. If the collector does not intent to actually sue, this is a violation of the Fair Debt Collection Practices Act (FDCPA), which prohibits a debt collector from threatening to take any action that it does not intend to take.

What to do if a Debt Collector is Threatening to Sue You

While the FDCPA prohibits debt collectors from making threats to sue if they do not actually intend to do so, many will still use this tactic as a way of scaring a consumer into making a payment on a debt. If a debt collector is threatening to sue you, there are a few things you should do:

  • Avoid admitting to the debt collector that you owe the debt
  • Request verification of the debt if you are unsure you owe it
  • Keep track of all phone calls and threats of a lawsuit from the collector
  • Consider consulting an FDCPA attorney

Avoid Admitting You Owe the Debt

The first rule of communicating with a debt collector is to never admit that you owe the debt. If you ultimately decide not to pay a debt, for whatever reason, the debt collector will have to prove that you owe it in order to successfully obtain a judgment against you. If you are recorded admitting you owe the debt, or the collector receives written communication from you admitting that you owe it, this will make obtaining a judgment against you that much easier.

Request Verification of Unknown Debts

If a debt collector is threatening to sue you for a debt you are unsure is yours or for one that you believe has been paid, you should request verification of the debt from the debt collector. You can do this on the phone, but if you do not receive the verification with ten days or so, you should follow up with a letter requesting the verification.

Keep Track of All Communication with the Debt Collector

A debt collector who is threatening to sue may be in violation of the FDCPA and you may have a lawsuit against them, so you should keep a record of all phone calls, including the time and date of the call, the name of the customer service representative you spoke with, and what they said. You should also keep all letters that you receive from the collection agency.

Consider Consulting an FDCPA Attorney

If a debt collector has sued you or threatened to sue you, you should consult an FDCPA attorney to help you determine if they have violated the FDCPA and to protect your rights. Feel free to contact our office at 1-800-219-3577, for a free, no obligation consultation. 

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