How to Avoid Being Sued For Debt (Even If The Law Suit Is Already Filed)

If you are being sued for debt, or fear that you will be soon, there are some things you can do to keep yourself from losing in court. More than ever, people are finding themselves in this type of predicament. With the economy in shambles and unemployment continuing to plague Americans, it's important to know that there are some things you can do to save your assets. If you are being sued for debt, or fear that you may be soon, here's what you can do.

Difficulty: Moderate

Instructions

1. Contact a credit counseling company if you are being sued for debt. This can be an effective way to avoid a law suit as well, so it's a great method whether you're in the predicament or feel that you will be soon. Credit counselors will work with your creditors to negotiate a lower interest rate, and sometimes that reductions of late fees and penalties. Think of this as essentially being a loan, but it's reserved for people in desperate financial times. You will pay the credit counseling company once a month, generally much less than you're paying now, and they pay your creditors. Try to stick with non profit companies. This is a viable option if you are being sued for debt.

2. Consider negotiating on your own if you fear being sued for debt. This may not be effective if the law suit has already been filed, but it's still worth a shot. Don't be afraid to use the word bankruptcy when talking to your creditors. Make sure you are professional, as the call will likely be recorded and could be used in court. Still, if you fear being sued for debt, it's worth a shot. Try asking for a reduction in fees or interest. If you have access to a chunk of money, you can see if the company will take a lump payment smaller than the amount you owe. If you are already being sued for debt you should still give it a shot.

3. Find a lawyer if you find yourself being sued for debt. It is possible that the lawyer can find a way out. Many companies have broken collection laws in the past, and it's entirely possible that the company you're dealing with has broken the law as well. While not generally free, many lawyers will at least offer a free or low cost initial consultation to review your case. If they find issues with the collection agencies attempt to collect, you may be able to avoid being sued for debt.

4. File for bankruptcy as a last resort to avoid being sued for debt. If you are looking at a large sum of money, or multiple creditors, it may be your only option. This will work if the suit has already been filed, or you fear that it will be soon. While this will harm your credit score, it will give you an opportunity at a fresh start. Over time, you can rebuild your score and make the improvements you need to avoid being sued for debt in the future.

Tips & Warnings

• Use bankruptcy as a last resort to avoid being sued for debt.