When you have several debts that must be paid, it can be difficult to juggle your bills every month. You may be inclined to only send a small amount of money to one of your creditors each month. Although you may be making regular payments, this may not be enough to keep you from being sued by your creditor.
Making Regular Payments
Even if you are paying a regular amount to your creditor each month, you could still be sued for the debt. To avoid getting sued for your debt, you need to set up a payment plan with your debt collector. Unless the creditor agrees to the payment plan, you cannot simply make up your own terms and send in a payment each month to avoid a lawsuit.
Proposing Terms
When you find yourself with a debt, you may want to propose a payment plan to the creditor. Instead of allowing the creditor to set up the terms of the agreement, you can be proactive and try to set the terms yourself. With this process, you can determine how much you can afford to pay and then write a letter to the creditor proposing this as a monthly payment. You can also send a check for your first payment. The creditor can then decide whether these terms are acceptable.
Get It in Writing
If you work out payment terms with a creditor, you should get them in writing. If the creditor accepts your terms or proposes its own terms, you should make sure that you have something in writing. This way, if the creditor does file a lawsuit against you anyway, you can prove that you were living up to your end of the bargain. At that point, the lawsuit may be dismissed and you can keep making your payments.
If Lawsuit Is Filed
If a lawsuit is filed and you do not have terms of writing, you may not be able to do much to stop a judgment from being issued against you. In this case, you may be forced to set up a payment plan with the creditor on its terms. You could also have your wages garnished or a lien placed on your property. Some creditors may levy your bank accounts or property to pay the debt.
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