Law Office of Allan E. Dunaway, PLC

Collection agencies suing debtors, seizing wages

Where repeated phone calls or past due letters were once the main products of creditor harassment experienced by people unable to pay their debts, litigation has become what people should fear. Kentucky residents who have outstanding debts may get a surprise in the way of asset seizure. Wages, secondary homes and other assets may be taken to reimburse debt-buying agencies who win in court even in cases where the debtor was unaware that he or she was being sued.

The amount of debt money collected through litigation went up from $582 million to more than $1 billion just from four debt-buying companies, according to the Center for Responsible Lending. Some of the people sued aren't even the ones who got into debt in the first place. Some debt collectors make mistakes and sue people whose names are similar to the original debtors. Unfortunately, if people don't realize they're being sued and get the chance to correct the mistake a company may win the case.

Collection agencies might arrive in court with a thick stack of documents that might not prove defendants owe them anything but because of a lack of time judges might still rule in their favor if no one disputes their claims. However, only six percent of accounts that debt-buying agencies purchase come with documentation, according to the Federal Trade Commission. This means that even if an agency is suing the right person that person's alleged debt might not be real.

It's crucial that people answer summons in cases of debt collection even if they know they are not the people who incurred the debt. An attorney could assist people in proving to a court that they were not the ones who originally opened the line of credit. An attorney might also negotiate with debt collectors and settle out of court, thus preventing wage garnishment.

Source: The Huffington Post, "Debt Collectors Have Figured Out A Way To Seize Your Wages And Savings", Hunter Stuart, June 02, 2014

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