If you have been sued by a collector, but the case has not yet gone to court, there are a variety of credit repair techniques you can use to stop the legal process and avoid a judgment.
Stopping the Legal Process
If you have the resources to settle before your court date you should plan a strategy, have appropriate funds available, and contact the collector. From the credit repair point of view, it is advisable to stop the process before it becomes a judgment and shows up in the public records section of your credit report.
Reporting Rules for Judgment are Hard
Once a collection becomes a judgment, the original statute of limitation for the debt and the original reporting period limit are no longer applicable, and will be replaced with the rules for judgments, which allow a much longer reporting period.
Credit Repair Tactics
There are a few credit repair tactics you should consider in a case like this. The first thing you must do is research the statute of limitation (SOL) to see if the collector still has the right to push the case through the courts. SOLs for debts are very short (in most states they are far less than 7 years), and the SOL clock starts with the date of the original default, not the date the collector gets the account.
Do Your Homework
Collectors sue people all the time for debts that are beyond the SOL, so you have good cause to do your homework; you may find that you can tell them to get lost. If the collection is beyond the SOL, you should contact the collector and tell them that they are wasting their time and money. You can even tell them that you might sue them for wasting your time!
Get the Case Thrown Out
If the collection is beyond the SOL and the collector takes it all the way to court regardless, you will need to show up and provide proof that the original default date occurred prior to the SOL limit. The judge will dismiss the case right away.
Considering a Payment Plan
If the debt is within the SOL you still have some credit repair techniques available. There is no harm in contacting the collector at this point. They have already started the legal process, and there is not much else they can threaten you with. As mentioned, if you have the funds to negotiate a settlement with, go for it. If you do not have the money you can consider negotiating a payment plan.
Proceed with Caution
We usually advise against payment plans for members of our credit repair service for a good reason. Once you enter into a payment plan with a collector you create a new contract, the old debt becomes a new one, and the SOL and reporting period clock starts again. But, in this situation, as long as you are comfortable that you can make the payments it can be worth doing if it will keep the case out of court.
You Are Not Alone
Don’t be intimidated by credit problems. If you are already a member of our credit repair services we will do the relevant research and advise you of the best options. If you are not already enrolled, we invite you to get started now. Let us clean up your reports and get your credit scores back up where they belong!