Can debt consolidation stop a lawsuit?

It will prevent any creditor from taking legal action against you in relation to the repayment of the debt. These include lawsuits, wage garnishments, and anything like that. In Minnesota, debt settlement or consolidation agencies are not usually lawyers. They promise to fix debt problems, but often they can't do it quickly enough to stop a lawsuit against you.

This means that even if you hired a company like the Lexington Law Firm or Freedom Debt Relief to prevent debts from getting out of control, a debt collector can still sue you. Once the debt collector has a hearing date, the debt consolidation agency will generally not defend you in court. This is because only lawyers can defend people in court, and most employees of debt settlement agencies are not lawyers. They are also usually domestic companies, not Minnesota locals, so they cannot appear in Minnesota courts.

Many Consumers Are Sued for Debt While Hiring a Debt Relief Company. That's why you should hire a law firm that includes defense of the lawsuit in your debt settlement agreement. In response to any demand, a debt consolidation company is unlikely to help you. Instead, they will say that they are “not lawyers” and will do nothing to protect their interests.

A bankruptcy lawyer can protect your interests in the event of a lawsuit. Filing for bankruptcy provides protection to the federal court from bankruptcy and many other advantages. Remember, the purpose of a debt collection lawsuit is to try to collect a debt that is in arrears (either in a lump sum or in payments). Therefore, a creditor may be willing to accept a DMP and cancel the lawsuit in certain circumstances.

If you choose this option, it's important to act quickly. Allow plenty of time for the company suing you to withdraw the complaint and accept your DMP proposal in writing before your subpoena deadline arrives. Yes, you may be sued by a debt collector, usually when you have at least 180 days in arrears on your account. If you don't qualify for Chapter 7 bankruptcy, a debt settlement plan is usually the best option, as long as the company you hire also agrees to defend all lawsuits.

You shouldn't assume that a debt is correct just because the company suing you includes it in a lawsuit. There is a limit to the length of time a creditor can file a debt collection claim against you. Someone whose debt is legitimate may try to negotiate a debt settlement in exchange for the lawsuit being dropped. On the other hand, if you don't meet the deadlines to appear in court, it will be significantly more difficult for a debt collection defense lawyer to help you.

Automatic stay prevents creditors from taking steps to collect a debt while bankruptcy is pending (unless the creditor files a motion for relief of the stay, which must be specifically granted by the court). Consider consulting a licensed debt collection lawyer, as they specialize in debt defenses and are likely to provide you with more detailed legal advice. Even if the debt relief agency is on the rise, if your personal financial situation changes, it can disrupt relief plans. The most important thing to keep in mind when dealing with overdue debts is that the sooner you act, the better.

Filing for bankruptcy may also be an option for you and will end any outstanding collection claims and prevent future lawsuits for debts you owed prior to bankruptcy. But if a creditor or debt collector is suing you for delinquent credit card debt and you can't pay, it may be worth considering seeking bankruptcy protection from your creditors. If you go to a debt consolidation company, they will come to an agreement with you to negotiate with your creditors and get a monthly payment with a fixed interest rate. However, at the same time, bankruptcy can protect you from wage garnishment, tax refund garnishment, bank account encumbrances, and other potential negative consequences you could face if you lose a debt collection lawsuit.

Any legitimate business should be available in several days, once you have had time to verify that the debt collector is legitimate. . .

Evan Turomsha
Evan Turomsha

Award-winning twitter buff. Amateur web ninja. Total food maven. Typical travel fanatic. Certified beer geek.

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