Monday 26 February 2024

All You Need To Know About Debt Recovery Proceedings

There may come a time when you might require the help of a debt settlement attorney. For instance, when you contact a lending company looking for credit card assistance to settle some finances, such companies will tell you that they rarely sue credit card holders. The truth however is that such scenarios often occur because if you fail to pay the debt as agreed, the company will definitely sue you.

Other cases when you would need to hire a debt settlement attorney would be in the event of buying or inheriting a company that has unsettled debts.

All You Need To Know About Debt Recovery Proceedings

Before you rush to borrow money, it is wise to know the proceedings of debt recovery. This will enable you to know what will happen in case you are unable to pay the loan in time and therefore protect yourself from harassment from the debt collector. Knowing the proceedings of debt recovery will enable you to find a good lawyer when you buy or inherit a company with previous debts.

Pre-Legal Proceedings

There are two steps that a debt collector undertakes before finally taking the issue to court. The first step is to issue you with a letter of demand asking you to pay up. The letter contains details of the amount owed and what it is for. It also gives a specified period of time to settle the debt failure of which will lead to further legal action. At this stage you can either pay what you owe or try to reach an amicable repayment scheme with the creditor. If both options fail, the creditor moves on to the next step.

Step two involves brining in 3rd party bill collectors. The third-party hired by the creditor is tasked with the responsibility of convincing you to pay. Some bill collectors use harsh tactics such as harassment and threatening the life of your loved ones. In such cases, you can seek recourse in data recovery law. This law aims at striking a balance between the right of the creditor to get paid and the rights of the debtor to basic civil liberties.

Possible Lawsuit Outcomes

Before a debt recovery lawsuit reaches the court, the lawyers of the interested parties will first try to reach an out-of-court settlement. This entails negotiations that will reach some sort of payment plan that is fair to both the creditor and the debtor. If concerned parties are unable to reach a settlement then a lawsuit will be filled.

During debt recovery lawsuits, there are 3 possible outcomes. First, the debtor may be freed from the responsibility of paying the debt due to statute limitations or other reasons. The court may also rule in favor of the creditor and order the immediate seizure or sale of the debtor’s personal property to pay the debt. This may also involve freezing the debtor’s bank accounts.

Lastly your lawyer can avoid the worst case scenario by using, ‘consent judgment’. This does not allow the collection or seizure of personal property but rather involves the incorporation of a repayment plan.

Facing a lawsuit from a creditor is not a pleasant experience. In the event that such a scenario occurs, a qualified and experienced debt settlement attorney can get you through the procedure unscathed.

This article was authored by Donne Armstrong, a contributing writer for Donne loves writing informative articles that offer solutions to a variety of financial problems.