It can be frustrating to owe an old debt. In the back of your mind, you are aware that you still owe money, and you wonder how you will pay it or if you will be pursued.
Debts usually stay on their own. The creditor may stop pursuing you and write off the debt, but they’ll usually sell it to a collection agency. As soon as a debt collection agency purchases your old liability, they will begin a collection process that may be even more frustrating than the original creditor’s.
Most debt collection agencies begin the collection process by notifying you that they own your old debt. If you ignore their notification, they will contact you via letters, emails, and phone calls. Sometimes they will attempt to get you through your job or social media accounts.
It is common for a debt collection agency to be a law firm. Often, creditors turn over their debts to law firms if the amount due is significant or there is a high likelihood that the firm will be able to obtain a judgment against you.
You may have serious concerns if a lawyer is responsible for collecting your debt. Attorneys understand the ins and outs of debt collection and are less likely to give in to your defenses.
It should be noted, however, that even if a lawyer seeks to pursue you for a debt, you still have options. Here is what you should do if a lawyer is dating you for an old liability.
The lawyer of your choice can assist you
You can hire a debt settlement attorney if a lawyer for an old debt is pursuing you.
By negotiating with the other party, a debt settlement lawyer may be able to reduce the debt or stop it. To protect you from a potential lawsuit, these lawyers utilize a variety of defenses.
For example, the debt settlement attorney may argue that the statute of limitations for collecting the debt has expired. In some cases, they may find that you are the victim of identity theft or that the lawyer does not have a business relationship with you.
A law firm pursuing you will have no choice but to drop a potential suit if your attorney’s defenses are appropriate to your case.
The debt collector will, in the best-case scenario, completely discharge the debt. Nevertheless, this is unlikely if you owe the deficit in the first place. You may not be able to file a lawsuit against them, but they can still pursue you with phone calls and letters for the next fifty years (or until you agree to settle with them).
The debt settlement lawyer working on your behalf can negotiate a settlement on your behalf. You may be able to reduce the amount you owe by as much as 60% or more.
If the debt collector accepts a settlement, you pay the amount, and the debt will be reported as paid. In this case, you will not hear from them regarding the deficit again, and you can move on with your life.
Please keep in mind, however, that if you hire an attorney to handle your debt, you will have to pay for his or her services. You may sometimes have to spend several thousand dollars on their assistance.
You may not need a lawyer if your monthly debt is less than $2,000. Even though you may be able to settle the debt for half the amount, you will still be responsible for paying legal fees. There will be little savings (except for the headache of dealing with your debt collection lawyer).
The amount owed and the fees associated with hiring an attorney should be considered before you decide whether to hire a lawyer to assist you with the debt. If settling your debt for half the total due plus the expense for an attorney equals roughly the exact amount owed, it is time to take matters into your own hands.
Defending yourself against a law firm is possible
You may be better off negotiating with the law firm trying to collect a debt yourself. You cannot justify the expense of hiring an attorney to handle your affairs on your behalf.
You will need to bolster your defense strategies regarding the debt if you decide to negotiate your debt with a law firm. As soon as the law is in your favor – meaning you have a reasonable defense that could eliminate the liability – it would help if you understood how the protection applies to your case.
There are several straightforward defenses to debt collection, including the statute of limitations, identity theft, and last debt payment.
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Generally, statutes of limitations defenses rely on the fact that creditors may only attempt to collect a debt through a lawsuit for a certain period. For example, you may have an adequate defense if it has been more than three years since you incurred the debt.
A defense to identity theft asserts that someone stole your personal information and used it to borrow money illegally and without your knowledge. To establish your identity theft defense, you must take specific steps, such as reporting the incident to the authorities.
Finally, the debt collection law firm may not have complete information if you previously paid the debt. A payment receipt, proof of check cancellation, or other evidence can prove that you reimbursed the original creditor.
Other defenses may be available in a debt collection case. Choose one that best suits your needs. Establishing a defense makes it easier to negotiate the outstanding debt to zero or at a significant discount from the current amount.
The law firm should validate the debt
You will need to have the law firm verify that you owe them money before you attempt to negotiate the debt. Generally, any collection agency or law firm that attempts to collect money from you must prove that it has the legal right to do so. The amount of the obligation must also be confirmed.
In most cases, a law firm collection agency will provide you with notice that it is attempting to collect a debt and provide you with thirty days to dispute the claim. If this period expires, the law firm may begin regular collection activities, including attempting to sue you for the debt.
To buy time and ensure that the law firm is entitled to pursue collection activities against you, make sure the law firm validates the debt. It is their responsibility to prove that you owe them money.
A Debt Validation Letter can force them to validate the debt.
Once they can validate the debt, it is time to use your defense strategy (if you have one). Learn more by reading on.
With the law firm, negotiate a debt settlement
A person with a strong case against the debt collector can reduce their debt significantly. For example, the statute of limitations on debts about expiring can encourage a law firm to negotiate and other defenses.
The first step should be to contact the law firm and ask to speak with the assigned attorney. Please give them the identifying information about the claim, and inform them that you are in contact with them regarding a debt. You will typically receive a notification from the law firm containing an account number or another identifier.
The next step is to explain any defenses you may have to the claim. Let them know if the statute of limitations has expired and explain why. Alternatively, you may notify them of other defenses, such as an incorrect account balance or your intention to file for bankruptcy.
If they understand your defense, inform them that you wish to settle the matter so that you may move on with your life.
When negotiating, it is essential to start low. If the debt is old enough to satisfy the statute of limitations, you can offer as little as 25% of the original balance. Since the law firm has no option but to pursue a lawsuit against you, it may be more willing to settle and write off the debt.
It is still possible to negotiate a settlement or payment plan if your obligation needs to be updated to meet the statute of limitations. However, it is unlikely that you will be able to reduce the amount you owe by more than 50%. It is usually the case that a law firm will only agree to reduce your liability by 20% to 30% unless you have a strong defense.
Saving even a small amount of money can help you eliminate your debt. Usually, it is best to accept the offer and pay off the amount due if the law firm is only willing to take a 20% to 30% reduction. Work out a payment plan if you cannot pay the bill simultaneously.
Even though a notice from a law firm seeking to collect money from you may be concerning, you should be aware of your rights. Negotiate a settlement and avoid further damage to your credit.