What to do when you get sued by a debt collector

On Behalf of | Sep 27, 2021 | IRS Tax Law

If you get behind on debt in Austin, Texas, you may get contacted by debt collectors. Some lenders sell debts to third-party agencies who sue debtors. However, if a debt collector sues you, there are some steps you can take.

Fair Debt Collection Practices Act (FDCPA)

This Act forbids debt collectors from using deceptive or abusive methods for debt collection. However, under tax law, the FDCPA cannot stop the collection of delinquent taxes, student loans, or domestic obligations. The debt collection agency must say who they represent and the name of the lender who had the original debt.

Debt collectors cannot threaten violence, say that debtors will be arrested, call repeatedly, visit a debtor’s workplace, falsely threaten lawsuits, or call between 9 p.m. and 8 a.m. They are allowed to call your workplace and make arrests if you violate orders to appear in court.

What to do if you get sued

The first thing to do is never ignore the notice because the creditor may win from a default judgment against you. If you spoke to the collector, you should get a validation letter within five days stating who you owe and how much. You commonly have 30 days to file an answer to the lawsuit, and then the collector must validate the debt to the court.

Determine if the debt has reached the statutes of limitation, which bars collecting debts after a certain number of years. Sometimes, people are sued for debt they have already paid, debt that is someone else’s or a wrong amount. Present the court with documentation that proves the error, or attempt to work out a payment plan if you owe the debt.

Ignoring a lawsuit often makes it harder to challenge the debt. If a debt collection agency violates the FDCPA, you may file a complaint.