The Harsh Consequences of Disregarding a Collection Agency
Understanding the Impact of Ignored Debt
If a collection agency can locate you and determine your place of work, they can garnish your wages. You may want to conduct a web search on garnishment as Google often provides extensive details.
My advice is clear: do not ignore them! A collection agency can seize your assets and even sue you, leading to a judgment that allows them to garnish your wages. You might not be aware, but they can also require you to cover court costs, attorney fees, and interest charges. This judgment puts you at a significant disadvantage and may not reveal the extent of the consequences until it's too late.
Proving the Debt is Yours in a Lawsuit
If a debt collector initiates a lawsuit and wins, they must substantiate that the debt is indeed yours. Debt collectors are notorious for their tactics, so it's crucial to be vigilant. They often hope you won't show up to court, but you are legally entitled to receive a summons. If you don't appear, they may secure a default judgment, which can have severe long-term consequences.
Engaging with a debt collector, even informally, can work against you. Therefore, the best course of action is to communicate in writing or via mail. This preserves your position and protects your legal rights. Consider consulting with an attorney to further safeguard your interests.
Strategies to Overcome Collections
When your debt moves into collections, it often results in a closed financial situation. You may not be able to obtain new credit cards or personal loans, and your chances of purchasing a new car get significantly reduced.
To address your debt issues, seek assistance from debt relief services. Organizations such as Debt Relief can take over your entire debt list, negotiating lower monthly payments and fees. You'll pay a lower monthly fee compared to your current payments, and they can help you negotiate a more manageable debt settlement. This program provides you with 3 months to start making payments; however, if you fail to catch up, the collection process will continue, potentially leading to a court appearance.
The Impact on Your Credit and Legal Rights
Suppliers and creditors may cut you off, and you will be summoned to appear before a court of law. Ignoring the collection agency provides limited benefits, as they will merely continue to attempt contact. However, it's important to note that they typically only sue for large debts, and by the time your debt is in collections, your credit score has likely already been damaged. Even if you eventually pay your debt, collection agencies won't typically alter your credit report.
To protect yourself, find out the statute of limitations in your jurisdiction. Once this period expires, the collection agency cannot sue you, provided you do not make any payments or acknowledge the debt.