During the global pandemic in 2020, consumer debt in the United States grew by $800 billion – the highest debt growth in a decade. In our post-pandemic normal, you may find yourself gripped with debt. If you’re experiencing collections calls and harassment from creditors due to missed payments, you might feel stuck. There are steps you can take to defend yourself against debt collectors with the help of an experienced debt collection defense attorney in Tennessee.

1. Hire a Debt Collection Defense Attorney

If you are served notice of legal action from a debt collector, act quickly. Even if you think you were served by mistake, do not ignore it. Respond to the allegations quickly by filing a formal Answer to the Complaint. A Nashville debt defense attorney can help you respond to a lawsuit in a timely manner to avoid a default judgment. If the court grants a creditor a default judgment against you, they may legally attempt to collect your debt by wage garnishment, taking money from bank accounts, and tacking on court costs to your existing debt.

Depending on where you live, you may have up to 35 days to respond. Residents of Tennessee have 30 days after being served to Answer. When creditors file collection lawsuits, they frequently assume there won’t be a response, expecting a judge will grant them a default judgment. After receiving a response, a debt collector may be willing to negotiate a settlement to avoid the cost of proceeding with the lawsuit or even dismiss the case entirely.

2. Challenge the Lawsuit

You can challenge a lawsuit in several ways, including challenging the creditor’s right to sue, determining the statute of limitations, or filing a Motion to Compel Arbitration.

By the time your debt is brought to court, many times it has already been sold to another company. That means the debt collector suing you may not be able to prove the debt is yours to pay back to them. Ask for documentation that you owe the debt in writing. If the creditor cannot produce a signed agreement or other documentation that you legally owe it and the complainant actually owns the debt, your case may be dropped.

You can also challenge a lawsuit by reviewing the statute of limitations. The statute of limitations is a set of laws determining how long a creditor has to sue for a debt. In Tennessee, the statute of limitations is six years. If your debt has been in breach for six years, you can win any case filed against you. The debt is not erased, but it does mean that a creditor cannot receive a judgment against you for wage garnishment or other action.

Finally, if you file a Motion to Compel Arbitration, you may be able to settle the matter outside of court. An arbitrator is a neutral individual responsible for reviewing the case, looking at the evidence, and determining its outcome. Many debt collectors would rather not deal with arbitration because it’s an expensive process and one that will likely not benefit them.

3. Negotiate a Settlement

Many collectors make their money by buying debt from another company for a certain percentage of the debt amount. When the new owner of your debt comes to collect, they stand to make a huge profit. It’s possible that you may settle out of court or agree on a lower payment amount than the original amount you owed. It’s better for you and the creditor to negotiate than to get too deep into a lawsuit.

If you and the creditor cannot reach an agreement, it may be time to file for bankruptcy. This is the last option you want to take, but it may be necessary if you can’t pay back the debt and are experiencing financial crises. While bankruptcy will wipe the slate clean and you will no longer owe the creditor that debt, it will hurt your credit for many years.

If you reside in Nashville, Franklin, Williamson County, or Davidson County and the surrounding areas and you are struggling with debt, help is available. The skilled debt defense attorneys at Fitzgerald & Campbell, APLC, want to help you protect your assets and your reputation. Contact them at 615-845-4595 or complete the contact form to request a consultation.