What you do before court depends on who is suing you: a debt buyer or an original creditor.
If a debt buyer is suing you
“Debt buyers” are debt collection agencies that “buy” debt from creditors. They buy it for a small percentage of what it is worth. The main goal of a debt buyer is to get as much of the debt paid as possible. They often harass people nonstop to get them to pay the debt. There are ways to stop the harassment.
Don’t give out information to debt buyers
Debt buyers often call you even after they sue you, to try to get you to pay all of the debt or make a payment plan. Stay strong! Don’t give them any financial information. If you admit a debt is yours, you could restart an old debt. Never say a debt is yours, even if you know it is.
Get information on the debt (in writing!)
Without saying the debt is yours, get information from the debt buyers before you do anything else. You can do this when they call you or in a letter. (You can get their address from letters they have sent you.) See the sample Letter to a Creditor Requesting Verification of Debt. Ask:
- Who is the original creditor?
- What is the original debt amount?
- When was the last payment made? and
- How much is owed?
Also, ask for statements, a copy of the original contract, and a “chain of title” (documents that say who the debt was sold to each time it was sold). If the statute of limitations (6 years)1 has expired, the debt collector can no longer sue you to collect the debt.
If the debt buyer sends you documents and you don’t recognize the debts they say you owe, the debt may not be yours. This could be because of fraud or identity theft. You will want to dispute the debt. Ask the company how to dispute the debt and ask for a Fraud Affidavit.
If an original creditor is suing you
Share your story
Once you get a summons to court, call or write to the original creditor to ask for information about the debt. When you contact the original creditor, it’s important that you let them know that you missed payments because of a financial hardship. This helps them know you can’t pay the full amount. They don’t need to know the full story but give them a few key statements that show your situation. For example, “I became ill” or “I lost my job” or “my hours were cut” etc.” Don’t be shy about your financial situation. Tell them if you are getting Social Security benefits, SNAP, MassHealth or any other government assistance. If you are “collection proof,” tell them this. If you don’t have the ability to pay, be honest about it.
Negotiation tips
Be friendly but firm
Be careful how you communicate. Don’t be rude. Debt collection lawyers are more likely to be flexible with you if you seem sincere and polite. Also, many debt collectors are willing to create a plan that helps you pay your debt.
Make sure you write down the debt collectors' name in case you have to file a complaint against them for violating any laws.
Hang up if you need to
If you’re dealing with a debt collector on the phone and things aren’t going well, don’t be afraid to hang up and call back. You might get a different person to talk to that you have an easier time with. Getting creditors to work with you can be frustrating. It may take several calls until you get someone who is willing to work with you and accept the amount that you’re willing to pay. Keep trying and don’t get frustrated!