Bankruptcy Law Network-

Collection agencies will refer delinquent accounts to a law firm when they reach an impasse with you about the payment of a delinquent debt. Often times, collection agency owners are owned by or are associated with collection law firms, so from the collection agency’s perspective a lawsuit is just another step in the collection process.

From your perspective, however, collection litigation should be taken much more seriously than dunning letters and collection phone calls. Litigation starts the clock running on a judicial process that can result in a judgment against you. In most jurisdictions a judgment means that every asset you own can be at risk. Liquid assets such as bank accounts and cash equivalent assets are at the most risk.

Once a suit is filed, it is too late to do much in the way of asset protection and if a judgment is rendered, the plaintiff has the right to demand from you specific information about what assets you own and where they are. This demand for information is part of the post judgment discovery process and you do not have the option to ignore these requests for information. If you do ignore discovery requests you can be sanctioned by the court and even imprisoned if you remain in contempt of the court’s order.

Therefore, if you are served with a lawsuit, or even if you discover that a suit has been filed against you but you have not yet been served, it is imperative that you take action immediately.

You have several options if a collection lawsuit is filed against you.

[BANKRUPTCY LAW NETWORK]

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