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Tips for dealing with a debt collection lawsuit

On Behalf of | Jul 11, 2019 | Chapter 7 Bankruptcy |

Some people in Virginia who have unpaid debt might eventually face one or more lawsuits. This can be stressful, and individuals who have no money may be tempted to ignore them. However, there are steps people can take to defend themselves against these lawsuits and possibly get them dismissed. Furthermore, failing to respond can lead to a judgment by default, resulting in such actions as wages being garnished. In responding to the lawsuit, people should not admit that they are liable for the debt.

Plaintiffs may be required to provide a number of documents backing their claims about the debt. This includes a credit agreement signed by the debtor, proof that the debt came from the creditor and documentation of all the money owed. Creditors may struggle to produce this paperwork in time or be unable to do so at all.

Debts have statutes of limitations. Creditors must file a lawsuit within a certain amount of time for the suit to be valid. It might also be possible to file a countersuit if the creditor has violated any part of the Fair Debt Collection Practices Act. An attorney may help a person decide whether these or other actions might be the right approach. Another option is to file for bankruptcy.

A person may qualify for a Chapter 7 bankruptcy based on income. This usually does not allow an individual to keep major assets, like a home, but he or she may be able to hold on to certain assets. An attorney can assist someone with filing for bankruptcy since errors in the paperwork may cause delays. All creditor action, including lawsuits, must cease when the filing is made. Most debts can be discharged in bankruptcy with a few exceptions, such as most student loan debts, child support and taxes.