What happens if you fail collections

They may start with harassing phone calls and escalate from there. But depending on your situation, you may never need to pay a debt collector. Not sure where to begin? SoloSuit can help. Debt seems like a fact of life for many Americans.

Four out of five Americans 80 percent owe some debt. There are usually two parties in debt collection cases. Often, a lender finds they can't collect a debt from a borrower. Interest keeps piling up on the borrower's loan, and there's no money coming in to pay it. A lender now has two options:.

A debt collection agency is a company that buys unpaid debt from a creditor. Debt collection agencies usually buy these debts for pennies on the dollar. Then, they attempt to track down a debtor and force them to pay. Because these companies specialize in tracking down alleged debtors, they're better suited to collecting unpaid debt than lenders themselves.

They employ a small army of sleuths equipped with the world's best search tool: the internet. Against these odds, an alleged debtor is hopeless. Debt collection agents can track their prey using anything from bank records to voting data - even internet providers! At first glance, it might make sense to just pay off a debt collection agency. After all, that's the easiest way to make them leave you alone, right?

Not exactly. Sure, paying a debt collection agency may get them off your back. But that's all it'll do. Evidence of the unpaid debt will remain on your credit report for another seven years. The actual amount of the debt doesn't matter. This can affect your ability to secure loans in the future. What's worse, intent doesn't matter in debt collection cases.

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This compensation may impact how, where, and in what order the products appear on this site. The offers on the site do not represent all available financial services, companies, or products. It can be difficult to speak with a debt collector, but actively avoiding contact with the debt collector can be just as stress-inducing.

If you continue to ignore communicating with the debt collector, they will likely file a collections lawsuit against you in court.

If you are served with a lawsuit and ignore this court filing, the debt collection company will then be able to get a default judgment against you. Once a default judgment is entered, the debt collector can garnish your wages, seize personal property, and have money taken out of your bank account. As mentioned earlier, you can run, but you cannot hide.

Here is the bottom line - never answering a debt collector is almost always a bad decision. Because, as we discussed above, ignoring the debt collector typically makes the situation worse and does not lead to a resolution. Ignoring the debt does not make it go away. This is why, if you are contacted by a debt collector or are served with a collections lawsuit, it is important to take action. SoloSuit helps thousands of people a day respond to debt collectors. If you've received a phone call or a letter from a collector, use our Debt Validation Letter to respond.

If you've been sued for a debt, respond with our Answer document. I can't thank you all enough for making an overwhelming situation something handleable. If you need help in effectively responding to a debt collection lawsuit, consider utilizing the services available through SoloSuit.