In Georgia, and throughout the United States, many people are struggling to stay afloat financially. If you’re among residents in this state whose total household income is below $40,000, you no doubt understand how difficult it can be to overcome even the slightest financial crisis, such as unpaid medical bills or credit card debt. Such situations often lead to legal problems, especially if a debt collector files a lawsuit after you’ve claimed bankruptcy.
The Fair Debt Collection Practices Act (FDCPA) protects you against creditor harassment. The fact that such laws exist, however, doesn’t necessarily keep debt collectors from harassing people; it happens often. It’s important to understand your rights and to know how specific types of debt relief, such as Chapter 7 bankruptcy, create a stay against litigation, meaning if you have filed for bankruptcy under this program, no one can sue you to collect a debt.
What debt collectors can and cannot do (legally) prior to filing for bankruptcy
There are conditions under which a debt collector may file a lawsuit against an individual who has failed to resolve a debt. If you were to receive a summons regarding such a lawsuit and do not issue a formal response, the court can rule against you and order wage garnishment (money deducted from your paycheck) to pay the debt you owe.
While you will not face arrest for unpaid debts, a judge can issue a warrant for your arrest if you disregard a court summons. What a debt collector cannot do, however, is harass or threaten you in any way.
You can request a dismissal if a creditor sues you after filing for bankruptcy
There are several issues that constitute invalidity regarding a debt collections lawsuit. For example, if a debt collector has filed a lawsuit after the statute of limitations has expired (which, in Georgia, is six years), the judge will likely dismiss the case. If the debt collector has failed to legitimize the debt (prove that you owe it), this would also make a lawsuit invalid. Finally, if you have already discharged the debt by filing for bankruptcy, a collection agency or creditor cannot sue you for it.
In Georgia and beyond, many creditors and debt collectors win lawsuits by default when individuals summoned to court fail to issue a formal response. Being sued to collect a debt can be a scary experience; however, there are often options available to request a dismissal or to obtain a favorable ruling in court, especially if you have filed for bankruptcy prior to receiving a summons.