Most Consumers Do Not Respond to Collection Lawsuits

Consumer Rights Under the FDCPA

I ran across an interesting statistic on attorney Sergei Lemberg’s informative Stop Collector blog.  Sergei referenced an Federal Trade Commission (FTC) statistic that close to 95% of consumer defendants fail to respond when sued by a debt collector.

I suspect that many consumer debt defendants do not respond because they know that they have not paid their bill and they figure that there is no point in coming to court to defend a hopeless position.  Still others may be concerned about what might happen to them in court – clients regularly ask me if they are at risk of imprisonment if they do not pay their debts (the answer, of course is “no” – there are no debtor’s prisons in the United States.

As Sergei points out, however, ignoring a lawsuit is rarely the best course of action.  First, the amount in the lawsuit could be wrong – I recently spoke to a client who was sued for over $20,000 for a $7,000 debt.  My client did not contest the lawsuit and now it is a judgment.  Our only recourse in this situation is a bankruptcy, which can strip the lien and make the debt unsecured and dischargeable in bankruptcy.

Second, the FDCPA provides useful leverage in debt settlement negotiations.  If the debt collector has violated the FDCPA, you may be able to negotiate better terms and a more favorable settlement, or even a cancellation of the debt.

At the very least, you should always ask an FDCPA lawyer to review any lawsuit that has been filed against you along with any associated documentation.

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Jonathan Ginsberg

For over 25 years, Jonathan Ginsberg has represented honest, hardworking men and women facing financial troubles.

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