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Collection Lawsuits: Fighting Back

In a dispute between a creditor and a debtor, the climax of the conflict usually occurs with a lawsuit over the amount being collected. A creditor files a petition with the court as an action of last resort when a customer owes them money and has not paid. Lawsuits are usually the last option for creditors because, even for them, they are costly and time-consuming. For that reason, they are rarely utilized and usually involve debts over $1,000.

Although they are seldom filed, lawsuits are among a creditor's favored threats when attempting to collect a debt from a consumer. Without an actual court order, the creditor has no method of taking action against their debtor such as taking control of wages.

There are few options available to consumers when they find themselves in a difficult situation that seems like it may lead to a collection lawsuit. The first is to attempt a negotiation with the creditor. This may be difficult because in order to negotiate a settlement with a creditor, the consumer must offer something in return. If circumstances allow, this can be done by agreeing to an upfront lump sum of money but even then, many collectors and banks require 100% and sometimes even added attorney's fees.

The next option would be to file bankruptcy. There are mixed feelings about whether bankruptcy is helpful to someone facing such debt that a lawsuit is a possibility. If anything, telling the collectors that one may have to file bankruptcy because of the debt will encourage a negotiation. This is because a creditor would rather obtain at least a partial repayment than no repayment, which would be the case if their consumer filed bankruptcy.

Unfortunately, these options do not work out for every creditor and every once in a while, a lawsuit is filed. What then? It may seem as though there is little chance of winning or even of a slightly favorable outcome, but there are still methods of defense and rebuttal. Many consumers may find favor with the court if they show that the creditor or company used false advertising in the selling of the product or pressured the consumer into buying. A company may also lose credibility if the consumer shows that they hid pertinent information about the transaction until after the agreement was signed or neglected to provide the customer with a "right to cancel" form, which gives them the right to cancel the sale within a certain amount of time for any reason.

Each collection lawsuit is different. Therefore, to state that there is a set formula on how to defend oneself against collection litigation would be impossible. However, the one universally agreed upon action to take when, and even before, a lawsuit is filed over an outstanding debt is to contact a California collection harassment attorney. This will not only ensure that your rights remain protected at all times but also that you have a legal professional working for your side to build a case for your defense with any information he or she thinks, according to their professional opinion, may help you.