First of all, it is worthwhile to understand that a loan can be a very good solution if there is an understanding of how to handle it and how to repay in the short or long term. With information available, for example, to all non-bank creditors in Latvia, it is possible to find various alternative solutions, their valuation, maximum loan amount, feedback, etc. Another situation is if you have been sued by a debt collector because then you have an extra thing that needs to be enough much attention to solve it.
If you have been sued by a debt collector, you must answer the lawsuit. You may respond in person or through a lawyer, but this must be done by the date specified in the court documents. When you answer or ask the court to answer your lawsuit, the debtor will have to prove to the court that the debt is topical and that you owe it.
Tip: If you sue, read the lawsuit carefully and answer all deadlines. If you do not answer, the court will probably make a judgment against you as required by the trial.
Warning: Although you have been properly served with a lawsuit, you will not be able to stop the lawsuit by refusing to take a lawsuit or “service”. By doing these things, you will seriously ignore the lawsuit, and the court might consider it possible to complete it without you. If you ignore the lawsuit, it is likely that you will be charged with the amount claimed by the creditor or the debtor that you are obliged to repay. Often, the court also imposes additional fees on you to cover the costs, interest and lawyers’ fees.
Judgments give debtors much more powerful tools to recover debt from you. Depending on your situation and your national legislation, the creditor may:
- Keep your pay on your pay
- Put a pledge on your property
- Move to freeze or guarantee all or part of the funds in your bank account
Warning: You may also lose the ability to argue about debt if the court decides against you. The judgment is a court order. Only the court can change it. If the case is over, it is difficult to change the judgment or cancel it. If you defend the case, you have a much better chance of defending yourself in court than when you wait until a court judgment is imposed on you. You may also be able to come up with a compromise or solution in consultation with the debt collector before the court decides.
Tip: Consult a lawyer in your country to learn more about your rights if you are sued for debt. Some attorneys may also offer free services or require a reduced fee, for example, through a local law firm. You may want to find an attorney who is experienced in debt collection law and debt collection. There may also be legal aid offices in your area that will offer their services free of charge if you meet the criteria.
Arrangement with a debt collector
Before negotiating debt settlement, learn about debt and plan a realistic proposal. Consider the following three-step approach to prepare for discussing or reaching a recovery agreement:
Learn about Debt Plan a realistic refund or billing proposal. Discuss a real deal with a debt collector Any debt collector who will contact you to collect a debt will give you some information when it first contacts you, or in writing within 5 days of contacting you, including:
- Name of creditor
- Amount to be paid
- That you can challenge the debt or claim the name and address of the original creditor if it is different from the current creditor.
You can challenge the debt or request additional information from the debt collector. If you’re not sure who you owe money or how much you owe, it’s usually a good idea to learn more. After 30 days from the receipt of the validation notice when you challenge the debt portion, the debtor is not allowed to contact you again until he or she sends you a written proof of debt. You can also find samples of letters on the Internet that you can use to respond to debt recovery. Favorite letters can help you get information, set limits, stop any further communication, or use some of your rights.
If you do not recognize the creditor’s name, you can ask a question about the original debt (credit cards, mortgages, etc.) and ask for the name of the original creditor. When you have received a response, compare it with your records.
Plan a realistic refund proposal
If you would like to make a proposal to repay this debt, here are some considerations:
- Be honest with yourself about how much you can pay each month. First, review your debt priorities, as there may be additional issues when you accrue other bills if you pay this debt.
- Write down a summary of your monthly income and all your monthly expenses (including the amount you want to repay each month and other debt payments). Try to provide some income left over to cover unforeseen expenses and emergency situations. A credit counselor can help and often provide services through non-profit organizations for free. Beware of companies that claim they can renegotiate, settle, or change your debt.
- Decide the total amount you are willing to pay to settle the entire debt. This could be a lump sum or multiple payments. Don’t pay more than you can afford.
The limitation period is the period when you can be sued in court. Most limitation periods are in the range of three to six years, although in some jurisdictions it may be extended for longer. In some countries, a partial payment may restore the limitation period. It can also resume the length of time the negative information continues in your credit standing. If the term of the restrictions comes to an end, the debtor may be ready to negotiate with you on more favorable terms. If the status of the restrictions has passed, then your defense against the lawsuit may stop the creditor or debt recovery from the judgment. You can ask a lawyer for a limitation period for your debts. To find a lawyer in your country, just find the right information site or phone advice. Low-income consumers are eligible for free legal aid.
Discuss your proposed repayment plan with a debt collector
- Explain your plan. When you talk to a debt collector, explain your financial situation. You may have more options in debt recovery than with the original creditor. You can also help with the help of a credit counselor or a lawyer to get a better result.
- Type your contract. Sometimes debt collectors and consumers do not remember their conversations. If you agree to a refund or billing plan, register your plan and debt recovery pledges. These promises may include the termination of debt collection or the deletion of negative data that may be detrimental to the creditworthiness indicator after these payments have been made. Get it in writing before making a payment. Debts can be very unpleasant, but if you know what to do, it should not be impossible to reach a mutual agreement or a court judgment that is proportionate.