It is a common misconception that the only negative consequence for not paying a collection agency is a poor credit score. The reality is that outstanding debt affects more than just your credit report and can even result in the creditor or collector taking legal action. While ERC does not engage in litigation to collect debts, according to the guidelines in the FDCPA it is within a collection agency’s rights to sue for your debt. If you currently owe money to a collection agency and want to avoid a costly lawsuit, try these alternatives:
HOW TO AVOID BEING SUED BY A DEBT COLLECTOR
- Stop Ignoring the Collection Agency – Debt collection lawsuits are almost always preceded by multiple attempts to contact the consumer. If you owe money and are behind on your payments you will likely receive multiple letters, phone calls (unless you request to stop phone contact) and notices about your past due debt. If the collector is unable to reach you, it may force them to take more drastic measures in order to recover the money owed.
- Pay Your Debt – Making any kind of payment towards your balance may help satisfy the collectors and creditors and prevent further action. Most times, the collection agencies and creditors are willing to work with you to come up with a payment plan that you can manage.
- Negotiate a Settlement – If you have the means to pay a portion of your debt, you may be able to discuss a settlement with your debt collector. Sometimes collection agencies are able to take a lump sum payment of an amount that is less than the full balance of the debt.