If you know you owe the debt, but your income and assets are all exempt from collection, show this to the creditor. Keep these documents in case someone else tries to collect the same debt in the future. Make sure that the creditor removes any lien it has filed against your property. (see lists of exempt property)Īfter you make your final payment, get a written statement from the creditor that the debt has been paid in full. There are rules that the creditor has to follow about what property they can put a lien on. ![]() If you agree to a court judgment, the creditor will most likely file a lien against any real estate you own. Get answers to all questions you have before you sign. Again, read everything you are asked to sign carefully. Part of the deal will be that you agree to court judgment for the amount of the debt. They may suggest that you accept service on a court complaint (instead of having you served by a sheriff). If you agree to payments, the creditor may still want to get a court judgment against you, to make sure you pay. Offer only what you can realistically afford. If you know you owe a debt and you want to offer weekly or monthly payments, be ready to prove your income and expenses. You may have to pay income taxes on the amount of the debt that was “written off Weekly or monthly payments Keep the statement in case someone else tries to collect on the same debt in the future.īe aware that the cancelled portion of some debts may be reported to the IRS. Once you pay, be sure to get a written statement from the creditor that the debt has been settled in full. Read it carefully and get answers to any questions you have before you sign it. The creditor may want you to sign an agreement. Make an agreement only if you can afford it. You need to convince the creditor that you are offering the most that you can afford to pay. If you know you owe the debt and you are able to offer a lump sum payment, be ready to prove your income and expenses. What if I owe the debt and don't have a legal defense? Lump sum payment Small Claims Court (within the District Court), or.If you didn't settle your debt by now, you may be sued. You can add any other legal defenses you may have, like an expired "statute of limitations," or that you are "collection proof" because of your low income and minimal assets. Here is a sample letter disputing the debt and asking for "validation" of the debt. If the creditor's lawyer agrees with your defenses, they may decide not to sue you. If the demand letter does not give this information, ask for it.įinally, in your letter, explain any legal defenses that you think you may have. the name and address of the original creditor, if different from the current creditor.the name of the creditor they say you owe. ![]() If you know you owe the debt, and you can pay, you can offer to pay a lump sum or to set up a payment arrangement.You can try to convince the creditor to stop trying to collect the debt because your income and assets are exempt (see lists of exempt property and earnings).If you don't think you owe the debt, say why you believe that you don't owe the debt.If you get a 30-day demand letter, you may want to send a letter back to the creditor. Is there anything I can do to avoid being sued over a debt? * A secured debt is one where you put some property up as collateral to get a loan, like a car loan or home mortgage. This guide covers regular unsecured consumer debt, like fuel bills and credit card debts. Sometimes the first debt buyer sells an account to another debt buyer. Then the debt buyers try to collect on the debts. Creditors sell their debt accounts to debt buyers. ![]() The creditor may not be the person you made the deal with. The person who you owe money to is the creditor. This guide will help you understand the court process and the rights you have. If you owe someone money, they can try to collect it from you by taking you to court. In Spanish What is this information about? We have started with a basic guide: What happens if I am sued for a debt in Maine District Court? We are working to update all of our debt collection guides to reflect these changes. This process will be different and more formal - but may give you a better chance to use a legal defense. Debt collection lawsuits that used to be handled in Small Claims Court are moving to Maine District Court. There are big changes happening in the world of debt collection in Maine as of Fall, 2021.
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