How to Handle a Creditor Who Threatens to Sue

When a creditor continues to contact you regarding a past due bill, late payment or a mistake on an invoice and threatens to sue to collect the money, you have some options besides conceding to pay. Creditors and bill collectors have a systemized process of seeking to get payment from you. Threatening to sue you for the money they claim is owed is considered a final-ditch effort to get you pay up.

Instructions

Gathering Information and Reviewing the Situation

1. Request all invoices, paperwork and related information regarding your account from the creditor or bill collector. It is important you have all the pertinent information on the account in question, including the date the creditor began their collection efforts.

2. Make sure you have copies of payments you have made on the account in question. Keep track of when, how and in what amounts you made payments on the account in question.

3. Keep a log of the phone calls you received from the creditor or their representative regarding the bill in question. Track times, dates and text of messages left on your voicemail (if any). Return the calls when you are prepared to discuss terms of repayment, but be aware that bill collectors will request you begin making payments immediately. However, do not call the creditor or their representative until you have made a final determination that you do, in fact, owe the money in question.

What to do if the Creditor is Incorrect

1. Write a formal letter to the creditor stating you do not owe the money and their demands for payment are incorrect. Send a copy to your local credit bureau along with a request that your letter be noted on your credit report.

2. By now, you should have already requested copies of invoices and written communications the creditor or their representative sent you. If you have not received the information you requested, reiterate your request in more forceful language in your formal letter.

3. It is also an excellent idea to send a certified letter demanding that all collection phone calls cease and desist immediately. Always keep a copy of all correspondence.

Tips & Warnings

• The Fair Credit Collection Practices Act, 15 U.S.C.S. Section 1692, protects consumers from a variety of misleading or misrepresentations from any creditor. If a bill collector violates any of the provisions of the Act, he/she can be sued in court.

• Creditors may threaten to sue with a letter that demands payment before a certain date, or other provisional agreements. Be sure to make copies of all correspondence and review it carefully before proceeding.

• Always make sure you have accurate records of due dates, timelines and actual amounts due. Don't be afraid to protect your rights as a consumer.