While creditors have the legal right to bring a lawsuit for non-payment of a debt obligation, such lawsuits are far less
common than most people think. It costs money to sue someone,
and a legal judgment is simply a piece of paper unless there
is a way to collect money against it. The threat of litigation,
on the other hand, is all too common, even though debt collectors
are not supposed to threaten legal action unless they are specifically
authorized to bring suit.
In general, lawsuits can normally be
avoided, provided you are willing to work out suitable arrangements
with your creditors through the negotiation process. Contrary
to popular belief, most creditors would rather work things out
amicably in a negotiated settlement than spend more money taking
a customer to court (with no guarantee of being able to collect
on a judgment). That's why thousands of litigation-free settlements
are transacted every month all across the country. Creditors
won't admit it publicly, but our method works much better for
them than forcing people into bankruptcy through overly-aggressive
collection techniques.
While National Debt Settlement is not
a law firm and does not provide legal advice, we do want our
clients to understand that the worst-case scenario is that a
client might be required to pay a debt balance in full in the
event of legal action by a creditor. This is little different
from the starting situation most clients find themselves in,
and again, it is a fairly rare occurrence.
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