Of the many troubles people with significant debt may encounter, being sued for collection is one of the most stressful. If you’ve ever been pressured by a creditor or a debt collection company to pay up, you know how invasive and threatening these companies’ tactics can be.
According to statistics from ProPublica, approximately 4 million Americans had their wages garnished as part of consumer debt collection lawsuits in 2013 alone. While wage garnishment has been a possible action lenders could take on defaulted debtors for many years, studies show that more and more lenders began taking advantage of this option around the time of the 2007 to 2009 recession. One possible reason for this could be the increasingly popularity of debt buying. Debt buying is when a debt collection company buys the debts from a larger lender for cents on the dollar and then attempts to collect the money from the original debtor. Statistics show that these companies are now filing the majority of debt collection lawsuits.
Unfortunately, Florida has not escaped this trend. The number of debt collection lawsuits filed in Miami-Dade County increased dramatically around 2004, peaking in 2007 with more than 28,000 lawsuits filed that year alone. While the number of lawsuits filed annually by lenders has been holding fairly steady since 2008, between 14,000 and 15,000 Miami-Dade county residents face debt collection lawsuits and possible wage garnishment every year. Members of minority communities, those making between $15,000 and $40,000 a year and those with high interest rate debts are at the most risk.
So what can you do if you’re facing a debt collection lawsuit? Don’t panic, but take it seriously. If you ignore the lawsuit and don’t respond, you’re likely to get a default judgment against you, which opens the door for a wage garnishment. The best course of action is to talk with an attorney as soon as possible after you are notified of the lawsuit. Judgments against the defendant are more common for those who try to navigate the court system on their own.
An attorney can make sure that the lawsuit is valid and then help you understand your options for fighting back. If you are facing an overwhelming amount of debt and decide that bankruptcy is an option you should be considering, an attorney can also help you understand which debts are and are not dischargeable under the different bankruptcy options and help you file the initial paperwork.