Collection agencies often use incredible scare tactics to get consumers to pay debts. They threaten to garnish wages, put liens on houses, take vehicles, and clean out your bank account.
What they don’t tell you is that in order to do any of these things, they have to get a judgment from a court of law first. That requires due process, and gives you an opportunity to stop them before anything egregious happens.
To get a judgment one must bring a lawsuit and give you a chance to be heard by a judge as to whether or not the debt is really owed. Only if you were to lose in court can the collection agency do anything about collecting the debt.
There are two solutions to the problem before it gets to that point. First, you can make a deal with the collection agency to pay them off. Usually they will accept monthly payments, or a lump sum. If that’s not possible, you can file bankruptcy and obtain a fresh start. In most cases, a Chapter 7 bankruptcy, and often a Chapter 13 bankruptcy, will discharge the debt entirely.
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Last modified: July 30, 2007