by Douglas Birk

IMPORTANT DISCLAIMER: This blog does not offer legal advice and the information listed here is for generalized informational purposes only and should not be construed as legal advice or a legal recommendation. Assessing an individual’s legal case involves a careful and complete evaluation of case specific facts and the legal options or possible legal outcomes for individuals will vary significantly. For legal advice, please consult with an attorney.

It is very common for everyday people, even diligent and responsible people, to receive a collection letter. Often, it is hard to know how to respond to these letters, or what your legal options might be in such a situation.

Collection letters can originate from credit cards, overdue medical expenses, or even past due parking tickets you probably thought you paid years ago.

Generally, the original creditor will turn the collection matter over to another firm to collect on the debt. Often, they sell this debt for pennies on the dollar. As a result, it is not uncommon for a debtor to be unable to recognize the creditor or specific debt since the assigned collector usually purchased the debt years ago without the debtor’s knowledge.

Unfortunately, failure to effectively respond to collection letters, or simply avoiding them altogether, is not a solution. Eventually, these creditors will seek a court ordered judgment that will permit them to garnish your wages and other assets such as bank accounts. By the end of the process, past-due debtors become liable for collection fees, court costs, and attorney fees resulting in a final judgment totaling several hundred dollars more than the amount of the original debt.

Meanwhile, the debtor’s credit is significantly damaged impacting the debtor’s future ability to obtain reasonably priced loans for such items as cars or homes.

So what should you do when you receive a collection letter?

Well, every situation is different. However, if the amount of debt is remotely significant, you should definitely consider contacting an attorney in order to explore your legal options. For example, it is not uncommon for creditors, through collection firms, to fail to serve a notice to a current address or upon a responsible person as required by law.