What to Do if Sued by a Collection Agency?

When your debt is turned over to a collection agency, you typically have a few different ways that you can resolve the issue. One of the tactics that a collection agency could use to try to collect the debt is to sue you. If you are sued by a collection agency, you need to act quickly to avoid negative consequences.

Contact

If you are sued by a collection agency, you will receive a summons. A process server will come to your home or will go to another location, such as your job, to deliver it to you. Once you receive the summons, you need to contact the collection agency immediately. If you ignore the notice, it will only cause you more problems in the future. Call the collection agency and talk to a representative about the debt.

Settlement

Just because you are sued by a collections agency, this does not necessarily mean that you will have to go to court. Many cases are settled outside of court and this is really the easier route to take. When you talk to the collection agency representative, talk about setting up a payment plan or some other payment arrangement. Most of the time, you should try to stay out of court if at all possible. When you talk to a representative from the collections agency, you may even inquire about getting negative statements remove from your credit report if you pay the bill in full.

Court

If you are unable to work out a payment arrangement with the collections agency, you will have a court date at your local court house. If you do not show up to the court date, the judge will automatically rule in the collection agency's favor. You should try to show up to the court date if possible. You will then be asked by the judge to verify your identity and whether you accumulated the debt that is in question. If this is the case, the court will rule in favor of the collection agency.

Judgement

Once the court rules in favor of the collections agency, you will have to repay the money. You may have some say over how the money is repaid. The court may work with you and the collections agency to set up a payment plan that you can stick to. If you are unable to set up a payment plan or pay the bill in full, the court could have your wages garnished or your bank account levied.