The Worst Thing a Debt Collector can do to You

Picture with me the following scenario:

You receive what looks like formal documents in the mail, or someone shows up at your doorstep to hand them to you, or you get a note in the mail saying you have certified mail to pick up at the post office. No matter how this piece of paper gets to you, it looks official and serious.

After scanning the document to make sure you’re not being arrested, you then realize that you are being sued. By a collection company. For a debt that you may or may not owe to a doctor, hospital, credit card company, or car dealership. Or some other entity that you supposedly owe money to.

What you do next with this document greatly depends on whether you understand what the WORST thing a debt collector can do to you. Here’s option 1 (the not-so-good choice):

  1. You ignore or forget (same thing) the piece of paper. Maybe hope it’s somehow not legitimate, or reason that you just don’t have time to deal with this right now. Or maybe you do owe the debt, so what’s the point of fighting something you already know you owe?

Option 2, below (the better choice):

2. You respond to the document by filing what’s called an “Answer.” Or you hire an attorney to do this for you. You show up in court when you’re supposed to, and you get all the information before settling or going to trial with the collection company.

You may be thinking to yourself: “But why go to all that trouble? That’s just attorney-speak for generating more business for themselves. Or, who has the time to do that? I’m working two jobs and trying to pay child support, there’s no time to deal with something I already know about.”

Don't just sit there! Do something!

Don’t just sit there! Do something!

Here’s where you are wrong. Option #1 allows the debt collector to do the WORST thing that they can do to anyone: ask for a default judgment from the court, and then move forward with enforcing their default judgment.

Default judgments generally provide the maximum amount the collection company is seeking, plus fees, interest, and costs of filing a lawsuit. Allowing a default judgment to happen to you just raises the amount of money you are going to have to pay. A default judgment also allows the collection company to garnish your wages, if you’re employed, or find alternative ways to suck money from you. Third, a default judgment becomes part of your public record, people can see it and draw their own conclusions about it.

Bottom line: the worst thing a debt collector can do to you is get a default judgment against you. Don’t ignore the paperwork they serve you with, and read the paragraph above to understand what makes default judgments the WORST.