A common consequence of owing unpaid debts is that you could be sued by the creditor, but there are ways to avoid this outcome in many cases. Many people forget about a debt and do not remember that they even owe money, until they receive a legal summons for the court case where the creditor is suing them.
If you want to avoid any creditor lawsuits then you must be prepared to act quickly. It is also important to understand that you have legal rights as a debtor, and to know what these rights are. If you have any questions about whether you legally owe a debt or you are concerned about your financial status then an experienced debt relief attorney can help.
If No Past Due Debts Are Owed Then No Lawsuit Will Be Filed
If you pay all of your bills on time then you will not have any risk of a creditor lawsuit. If this is not possible and you owe unpaid debts there are still steps you can take so the creditor does not sue you. Contact the creditor and arrange to make payments so that you can pay off the debt and prevent any lawsuit. This allows you to pay the debt on your terms instead of the terms set by the creditor or the court.
If you have any accounts that have been placed into collections you will need to contact the debt collection agency and set up a payment schedule that is affordable. This is not always possible but at least make an attempt, because a payment arrangement can head off a lawsuit from the creditor or debt collection agency.
Keep Records And Track Your Scheduled Payments
Always keep accurate and detailed records of all dealings with a creditor or a debt collection agency, and all payments that you have made on a debt. If an agreement is reached regarding the payment arrangements request that the creditor or debt collection agency put it in writing. Keep a ledger of each debt total, the payments made, the payment amounts and dates, and a notation when the debt has been paid in full. This will provide a legal defense if you are sued for a debt that has been paid or that you are still making the arranged payments on.
Once you have paid off a debt and made the last payment owed you will need to check and ensure that the creditor or debt collection agency notifies the major credit reporting companies in a quick manner. Sometimes creditors and debt collectors are quick to demand payment but slow to update your credit reports. As a debtor you have rights in this area, and a qualified debt relief specialist can help if you have any questions or concerns.
Do not panic if you receive a summons that shows you are being sued. Even at this late point it may be possible to fend off a lawsuit by contacting the creditor who filed the suit against you. Look at the summons and note who filed the lawsuit. Contact the filer and request payment arrangements. In some cases you can prevent being sued and take care of your debt this way.