Collection agencies have many tactics that they will take to make a debtor pay their bill, including harassing phone calls and threats, but if you do not take care of your account, sooner or later they will take legal action against you to collect the money. While lawsuits and court may sound dramatic, the situation is very non-emotional, and you should proceed with a methodical process to take care of the lawsuit.
Respond to the Lawsuit
You should receive an official notification of the lawsuit when a law enforcement officer hands you the papers. These papers will have a court date and the deadline to respond to the lawsuit. If you fail to respond within that time frame, the court could issue a judgment against you without a hearing. The clerk of the court should have a form that you can use to respond to the suit. If you do not owe this bill, state this in your response, but even if the bill is legitimate, you need to respond to protect your legal rights.
Statute of Limitations
If the original bill is a few years old, meaning it has been that long since you have paid anything on it, then it may be outside of the statute of limitations for debt collections. Most states have different laws concerning how long a collector has to sue you for a debt, ranging from two to 15 years. If you think that it has been longer than your state's statute of limitations since you have paid this bill, mention this in your response to the lawsuit and at the court hearing.
Contact the Agency
Just because a collection agency is suing you doesn't mean that they won't settle the bill. Contact the agency or the lawyer mentioned in the lawsuit directly to discuss this option. If you have the cash, offer 30 to 50 percent of the balance to settle in full. If you don't have the cash, try to work out an arrangement, but the collector may also want to proceed to court to get a judgment in case you don't fulfill your obligation.
Go to the Hearing
You must attend the hearing or the judge may automatically issue a judgment against you in your absence. It is up to the collection agency to prove the debt is valid, but be prepared to show evidence as to why it is not your bill if this is the case. If the bill is outside of the statute of limitations, demonstrate why this is so. If you are not able to pay the bill, bring financial documents to court with you, such as pay statements and your personal budget to show why you can't pay, or exactly how much you are able to pay.
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