What does it mean when a collection law firm has contacted me?

Not all unpaid debts will wind up in court. Some lenders and debt buyers use collection law firms a ton, while others use them sparingly, and others still, not at all.

What could happen:

1. When your account lands with a law office for collection, it typically means they are willing to sue in order to collect.
2. The collection law firm will normally send you at least one collection notice in the mail.
3. If that law office has an address in your state, or is licensed to practice there, you know a lawsuit may not be far behind. This is a great time to get fully informed about all of your strategic debt relief options, which will generally consist of:

• Setting up payments
• Settling for less that is owed
• Filing for bankruptcy
• Doing nothing if you are uncollectible (temporarily or permanently).

For more information on these points, please read the expanded sections below.

Setting up payments is easy enough. The law firm is ready to take your call and work through an acceptable monthly payment. Just be sure it is something you can afford every month.

Settling your debt for less than what is owed, and with a collection law firm, is commonplace. But be ready for the amount you save in the deal to be less advantageous than had you settled before the account took the legal track. There are some instances where settling for less, while still paying over a few months is an option. It is important to understand that you may actually need the legal process to unfold over several months in order to afford your settlement (by saving up more each month), or in order to get a better settlement outcome. That may sound a bit counter intuitive, but many of the Resolve partners are excellent at helping you through situations just like this.

Filing bankruptcy stops all collections in its tracks. This will include accounts places with attorneys, collection already in the courts, and even existing court judgments. Bankruptcy is a very powerful debt relief option, especially if you qualify for Chapter 7. If you have not talked with a bankruptcy professional yet, take the time to do so now that you are dealing with a collection law firm, or collections in the courts.

There are some who can be classified as uncollectible. This means you are on a fixed income, and receiving money from an exempt source, such as Social Security, disability, military retirement, etc. It also means you have no assets where a court judgment could result in a lien being filed, such as against a home.