Can a collection agency sue for debt? Many people who are over their heads with credit cards, car loans, and other bills want the answer to this question. Unfortunately, if you are behind on your bills, a collection agency can pursue remedies through the court system.
But they have to do it legally.
The Federal Trade Commission (FTC) has specific regulations that cover debt collection agencies. The Fair Debt Collection Practices Act keeps creditors from using deceptive, abusive, or unfair practices. These include threatening violence or harm, publishing your name in a newspaper or online, misrepresenting the amount you owe, telling you that you will be arrested if you don't pay, and contacting you by postcard.
Only companies which collect money on behalf of others are covered by this law. There are other regulations that cover contacting you as well. Debt collectors can only call you between 8 a.m. and 9 p.m. They may not call you at work unless you give them written permission to. That's all well and good. But it still leaves the question "can a credit card company sue for debt?"
Unfortunately they still have the remedy of going to court and getting a Judgment against you. At that point, they can execute the Judgment and potentially seize any assets including bank accounts, cars, or even real estate. They can also garnish your wages. You do have options though.
You can negotiate the amount down. The collection agency may require that you pay a lower lump sum or they may be happy to get the amount over a set amount of time. If you cannot negotiate successfully on your own, enlist the aid of a debt reduction company.
Finally, you have the option of declaring bankruptcy. At this point, none of your creditors can pursue court action against you.
So, in sum, the answer to "can a credit card company sue for debt?" is yes.
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