Although not all creditors will file a collection lawsuit, you are likely to sue if you have income or assets that the creditor can obtain to make a verdict. If you are being sued and think the statute of limitations has expired, you should consult a lawyer. And if the creditor receives a verdict against you, you should understand the various methods they can use to collect the verdict.
How likely is it that a collection agency will sue?
Often, these attempts, which may include overdue bills, a few phone calls, and a threatening letter or two, continue until the account is approximately 180 days past due. At this point, the account is then handed over to a collection agency or collection agency. During this time, I worked with collectors, collection managers, collection managers, executives and collection agency owners at many of Canada’s largest collection agencies. The collector may threaten to file a lawsuit during their collection attempts, but this does not mean that this will be the case.
What happens if you don’t pay debt collection?
If you are sued for a time-barred debt, tell the judge that the statute of limitations has expired. If you have a lot of debts and don’t have enough money to pay all of your debts in full, it may not be a good idea to pay off directly with a collection agency. How you choose to pay off your outstanding debts affects how long they remain on your credit report. If the collection agency tries to sue you for a debt after the time frame for filing a lawsuit has expired, you cannot be forced to pay.
References:
- https://www.consumerfinance.gov/ask-cfpb/my-debt-is-several-years-old-can-debt-collectors-still-collect-en-1423/
- What To Do if a Debt Collector Sues You | Consumer Advice
Barry Ritholtz is a renowned finance expert, author and blogger. With over 30 years of experience in the financial industry he has gained a reputation as a thought leader and influencer in the investment community.