By: Robert J. Nahoum
THE PROBLEM:
You’ve been sued in a debt collection case; you’ve explained to the debt collection attorney that money is tight and you can’t afford to pay the debt. Nevertheless, the debt collection attorney has offered to settle the debt by you making monthly payments of only $20 each. You’re perplexed –why would the debt collector agree to such a small monthly payment? How do they make any money with payments of only $20 per month?
THE RULES:
In a debt collection lawsuit, the Plaintiff (the party bringing the lawsuit) always has the burden to prove that the defendant (the party being sued) is responsible for the debt. To meet this burden, a debt buyer must prove that: (1) it has the right to sue you; (2) the debt is yours; and (3) you owe the amount for which you were sued. It is never the burden of the defendant to prove that he or she does not owe the debt.
While debt collectors are under no obligation to settle debt collection lawsuits, they often do because by doing so; they no longer have to meet their burden of proof. Settlement is win-win for the debt collector. If you pay off the debt after months and even years of $20 per month payments then they got their money and they are happy. If you stop making those monthly payments, then they have the right to automatically enter judgment without ever having to prove to the court that you owed the debt. Not only that, if the debt collector obtains a judgment against you for defaulting on a settlement, it may now know where your bank account and is. With a judgment against you, the debt collector can freeze your account and collect your money.
THE TAKE AWAY:
Sometimes settling a debt collection lawsuit is the most prudent course even if it means making small monthly payments. If you do, be sure to never give the debt collector access to your bank accounts and make all payments by money order or some other form that does not disclose where you bank.
If you need help settling or defending a debt collection law suit contact us today to see what we can do for you.
The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202
www.nahoumlaw.com