Whether you are hit with an unexpected bill, one slips through the cracks or you’re dealing with financial hardship, paying debts can be a struggle. Many unpaid debts end up going to in-house collections and then being sold to a third-party collection agency. Often, the debts are sold multiple times and it can get really confusing to even figure out who the original creditor was or who actually has the right to collect on the debt.

AwesomeOnce the debt has gone to collections, it can negatively impact your credit and the creditor can move forward with a lawsuit against you to sue you for the unpaid debt. If the debt collector wins, they can go so far as to garnish your wages or even your bank account.

If like most people, you’re living paycheck to paycheck, wage garnishment can hurt you even more financially. But if you are already struggling financially and are facing the possibility of losing more money, how do you afford legal help? How do you stand a chance of winning a lawsuit against you if you owe a debt? This article is going to cover what a debt collection lawsuit is and how you can come out on top if you’re dealing with one in Utah.

What Happens During a Debt Collection Lawsuit?

A debt collection lawsuit is when a creditor or third-party collection agency sues you for the balance on an unpaid debt. Almost any debt can go to collections including medical bills, credit cards, loans, utility bills, and other types of debt

.Usually, creditors write off debt if a consumer hasn’t paid their bill in a long time – usually about six months. The creditors end up selling the debt to a collection agency, who notifies you through writing that your debt has been turned over to them and that you owe them the unpaid balance. Besides sending written notice of the debt in collection, debt collectors can also call you to notify you of the debt and try to collect it.

Debt collection agencies usually give you a time period to pay the debt. Many offer a settlement to pay less than what you actually owe or will negotiate with you and put you on a payment plan. Going to court is a last resort that many debt collectors would like to avoid because it cuts into their bottom line.

However, if you don’t respond to the letters and phone calls, the debt collector can file a lawsuit against you. Usually, they only file lawsuits if you owe a significant amount of money, but they can file the lawsuit for any amount. Once they file a lawsuit with the court, you receive a summons with a court date to plead your case. When you receive a summons, you can opt for legal representation to help you with your case.

In many cases, people don’t get the legal representation they need for debt collection cases. In Utah, 99 percent of respondents in debt collection cases lack legal representation and the outcome usually hurts them. Many times, this means that the judge rules in favor of the debt collector. In other cases, the respondents don’t even show up to court, also causing the court to rule in favor of the debt collector, who is usually then able to garnish the respondent’s wages.

Wage Garnishments

If you lose a debt collection lawsuit, the judge can issue an order to your employer to withhold a certain amount of your paycheck until the debt is paid off. Although there are limits on how much of your income can be withheld, it can still cause a financial strain since you don’t ever see that income when you get paid. Wage garnishment can lead to further financial hardship, so it’s better to get legal representation so you have a greater chance of avoiding it.

Debt Collection Laws

Many people believe they don’t have rights when it comes to dealing with debt collection agencies. That just isn’t true. Under the Fair Debt Collection Practices Act (FDCPA), consumers do have rights that can help them in a lawsuit with debt collectors. Debt collection agencies are highly regulated by the federal government and some states have even tighter regulations to protect consumers from unfair debt collection practices, but Utah isn’t one of them, making it harder on financially strained individuals in the state.

However, consumer rights under the federal FDCPA can still be used to win a debt collection lawsuit. Without knowledge of how these laws work though, adequately handling your case may be harder, which is why legal representation can help you and save your finances, even if it doesn’t seem possible.

How Legal Representation Benefits You in a Debt Collection Case

Getting a lawyer or a Licensed Paralegal Practitioner to represent you in your debt collection lawsuit can help you figure out who the creditor is, if the debt collector is following the rules and if you actually owe the debt. If you’re worried you can’t afford a lawyer or traditional full legal representation, Utah Legal Coach can help you with its unbundled legal services.

Our unbundled legal services allow you to choose what services you want – whether it’s just reviewing your documents or preparing you for your hearing – while knowing the costs upfront, allowing you to set your own budget for legal help. While we still offer full legal representation, you can decide on how much work you want to do and how much help you want from us with our unbundled legal services. Book an appointment today for a coaching session and get the legal help you need to deal with your debt collection lawsuit.