Can a collection agency sue you?

Collection agencies

A collection company CAN take you to court to get it's money, however, this is unlikely for debts under $1500. It is unlikely a collection company would be willing to establish a payment plan as well, so if you are unable to pay upfront, you may want to call them on their threat and see if a claim materializes.

There is an alternative. If you are unable to pay the full amount up front, you may draw up your own payment plan yourself, signed by you, and mail it (certified return receipt) to the collection company with a check for the first installment (Say even just $50). By them cashing your check, they are, in effect, accepting your agreement, and even if they take you to court anyway, you now have evidence of your trying to pay, and their accepting of your terms. It will, at the very least, provide you some limited protection if they were to try you in court.

More input from FAQ Farmers:

• I was contacted by a collection agency 3mo after my hospital stay. This is after my insurance failed to pay any of my medical bill. When contacted I told them what I could afford each month. They told me flat out NO. and next I knew I was sued and my wages garnished (I had no idea this happened until I recieved the notice of garnishment from my employer) this was all over 365.00 now I owe 100 more in attorney fees.

• There are statutes of limitations on suing you to receive their $$ however. It depends on your state, etc.

• Yes, they can sue you and if they believe that they will be able to recover thier funds, they will definately follow through with it. They can garnish your wages or bank account. I work at a collections agency. We once garnished a man's checking account for $8000.00 They can still sue you if you are sending small payments. Some people are under the impression that if they send monthly payments of 25.00 they will not be sued.

• A collection agency can sue you for $25.00 if the client is willing to go that far. It costs about 200.00 total to file suit against a debtor. Anyone who says that they think that you should call them on their bluff is an idiot. Beleive me, I own a collection agency and when I say I will see you in court, it happens. Plus if it does go to court, the courts will force you to pay attorneys fees and court costs as well as the original balance.

• The previous statement "A collectionagency can sue you for $25.00 if the client is willing to go that far" by Paul is incorrect. This would fall under small claims court. The minimum amount owed would have to at least be $50 in order for the collection agency to file a claim against you.

• Collection agencies themselves cannot sue the debtor unless they are a collection law firm.

Even then the debtor must be sued in his or her own state court by an attorney licensed to practice in that state.

Lawsuits by collectors or by original creditors (such as a credit card issuer) cannot sue the debtor in a small claims venue.

One exception to collection attorneys following due process of state laws is a law firm such as Mann-Bracken who is licensed to arbitrate unsecured debts.

That too is relative, as a plaintiff winning in arbitration would still be required to go through the debtor's state court to have a judgment entered and the debtor could still claim the homestead and all other applicable exemptions allowed under the laws of his or her state.

First answer by Richard Gegg. Last edit by Macky. Contributor trust: 3452 [recommend contributor]. Question popularity: 226 [recommend question]