Dealing with a suit by a creditor or debt collector

Economic challenges for Minnesota residents can be frustrating, especially if the inability to keep up with bills results in a lawsuit being filed. Although dealing with a lawsuit may add even more stress to the situation, it is important to understand that ignoring it may only aggravate the situation further. It is important to respond to a suit promptly, observing dates specified in paperwork from the court.

A debt collector must provide proof of the defendant's responsibility for a debt. It is possible to face a suit due to a dispute of an amount or because a debtor disputes owing the debt at all. It is important to register this dispute prior to reaching the stage of the court making its judgment in the case. It is also important to understand that a debtor may be notified of a suit by mail. Refusing service won't halt or delay the action. In case of a debtor's absence at related proceedings, a judgment may be rendered on behalf of the collector regardless of the validity of the debt.

It is helpful to understand that if a judgment is entered, a debt collector's ability to seek payment becomes stronger. It may be possible to place a property lien, freeze bank accounts or garnish wages. Additionally, the loss of ability to dispute after a judgment limits the potential for further court action on the matter. Although debt collection can create stresses, it is important to continue to monitor communications from collectors and others to ensure that notice of a lawsuit is not missed.

In some cases, debt collectors may seek payment after the applicable statute of limitations has expired. It may be helpful to discuss such a matter with an attorney to put an end to inappropriate behavior by a collection agency.

Source: Consumer Financial Protection Bureau, "What should I do if a creditor or debt collector sues me?", November 09, 2014

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