Do Debt Collection Agencies Take You to Court?

The longer you go without paying a debt, the more anxiety you are likely to feel. You may be worried about your credit score dropping or repossessions of assets. However, there is one thought that may be the most worrisome, and that is wondering if you can end up in court due to your debt. Let’s take a look and determine if this concern is legitimate. 

Can a Debt Collector Sue You?

The short answer is yes, a debt collector is able to sue you in court. They can do this regardless of the amount of the unpaid debt. However, the higher the debt, the more likely it is for a debt collection agency to take legal action against you. When this happens, you will be served with a complaint and summons, notifying you of the lawsuit. This is often done by a sheriff or other authorized process server. You will have a limited amount of time to respond to the summons, and it is of the utmost importance that you do so. In Pennsylvania, it can happen at the magisterial district court (“MDJ”) or the court of common pleas.   

Should the debt collector win the lawsuit, they get a court judgment that allows them to levy your bank account, sell off personal assets, or in some cases, garnish your wages.  This can create serious financial hardship for you, which is why it is so vital that you take a lawsuit from a debt collector seriously and address the issue as soon as possible.

How Often Do Debt Collectors Take You to Court?

Debt collectors actually take debtors to court more often than most people realize. The chances of this happening largely depend on the type of debt. For example, debt collectors are most likely to file a lawsuit if the unpaid debt is from a credit card or a car loan after repossession. It also depends on which debt collection agency purchases your debt. Some agencies file a lawsuit as a standard part of their collection strategies. If one of these agencies purchase your debt, it is almost guaranteed that a lawsuit will be filed against you.

Can you go to jail for not paying collections?

In the United States of America, debtors’ prison has been abolished. This means that you will never go to jail for not paying collections. However, it should be noted that you could be arrested or imprisoned for disobeying a court order, such as failing to respond to a summons or appear in court after an order was issued requiring you to appear.  It is vital that you follow all court orders to avoid being arrested for contempt of court. 

What happens if you ignore a debt collection agency?

It is not recommended to ignore a debt collection agency. Doing so can result in serious consequences, including:

• Damage to your credit score.
• Increased debt due to interest.
• Having a lawsuit filed against you. 

If possible, it is best to avoid the consequences. Potential options include debt settlement or starting a payment plan. To explore these options, you will need to negotiate with the debt collection agency. You may also consider filing for Chapter 13 bankruptcy, which will reorganize your debts into a more manageable monthly payment. 

What to Do If a Debt Collector Sues You?

If a debt collector sues you, the first thing you should is contact an attorney.   The attorney will discuss your options including responding to the summons/complaint. Failure to do so will result in a default judgement against you. A knowledgeable attorney will be able to guide you through the process and give you the best chance of winning the lawsuit or settling for a reasonable sum.  Or, in the alternative, discuss other legal options such as a bankruptcy filing.