Can a collection agency sue you for more than the charge off amount?
I have been going through a lot in the last 3 1/2 years especially with my finances. Working as been very up and down for in the last year. I had to find a place to live with the hope of being able to pay the rent. Anyway with these issues at hand I couldn't pay my bills and the debt has accumulated. Now I am being sued by a collection agency in which I received a summons by mail. I already filed an answer and now I'm wondering about the amount they are suing me for.
Can an collection agency sue you for more than the charge off amount of the original creditor?
—W.G
Debts that remain unpaid do continue to accrue interest. The interest after default is typically set to an extreme, such as 29%, or even higher. This interest is allowed to accumulate after charge off. In many instances the size of your debt balance will increase even after its been sent out to a collection agency. If the account has been delinquent for the 3 plus years you mentioned you have been experiencing financial difficulty, the balance will have dramatically inflated.
During the collection lawsuit process you can request an accounting of all fees and interest and how calculated as part of your discovery requests. If you are being sued by a collection agency or debt buyer there are several additional important requests you could make.
Are you working with an attorney? Do you have access to one?
Trying to navigate the court process on your own can prove difficult. Having an attorney on hand to defend a collection agency lawsuit is setting yourself up for a higher chance of success in fending them off. It is not impossible to defend yourself, it will take a ton of time and dedication. The frustration of defending yourself against a collection agency can be a simple court process that is second nature to a legal professional, but not to you. There can be local court rules that you did not know about that could hurt your chances.
Who was the original creditor? What was the balance at the time you stopped making payments? What is the balance now? Who is the named plaintiff in the lawsuit? Is it a collection agency or a debt buyer? What is the name of the attorney debt collector or collection firm?
If you could answer the above questions in the comment section of this post, I may better be able to suggest a next best step for you to take.
About Michael Bovee
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Michael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.
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