Debt Collectors only sue around 1% or less than of their debts they are trying to collect.
There are many reason why debt collectors dont sue you, Lawsuits are a very expensive, slow process. The court system is so clogged that it takes months for a case to be heard (the average is 16 months). It also cost the debt collector money, This means they must hire a local collection attorney who expects payment regardless of whether or not he ever collects from you
Creditors don't sue those who stand up for themselves. If you claim that you don't owe the debt and they cannot prove that you do in terms of the original Credit contract , original loan application and especially unsecured debts like credit cards the odds that you will be sued are reduced significantly regardless of how much you owe or how much they threaten to sue. The average creditor's attorney isn't willing to go after a debtor who is putting up a fight even if the amount of money owed is significant. So, when someone claims you owe a debt, send them a certified letter requesting the following documents original credit contract, original loan application how the serving was calculated e.g what income compared liabilities was used to approve the loan, what servicing buffer was used extra and you want to see all notes on file that was made by the banker that approved the loan, this is just a summary click here to down this template letter to send them. After they receive this letter from you the odds of being sued will go down tremendously.
They can not take any house hold items that are in your house. Infact never let anyone in to your house that is collecting on behalf of the debt collectors. They have no legal rights to enter your house without your permission
If they do try and Sue, Below are Their options:
- Garnished wages
- Come after your assets
- Seize your Bank accounts
Lets go through each scenario and how to best protect yourself in this situation.Garnished wages - The maximum amount that can be taken from wages is 20%.However if you are on centrelink or pension benefits this type of income cannot be garnished! And the 20% can only come from your disposable income of your living expenses are paid.
Come after your assets - There are restrictions of what type of assets they can come after - If you have a house they will come after any equity that is in the house - equity= Your house valuation minus the mortgage amount against the house. For example if your mortgage is 400,000 and you house is valued at 500,000 they can potentially force you to refinance your home loan to cash out your equity to pay back their debt, if it is less than the equity amount. If you do have Real estate assets and you are in this position you should consider moving your house into a trust structure - this will protect the assets equity.
If you have a car worth more than $7,700(indexed annually) They can try and get a court order to repossess your car to cover their debt
Bank Accounts - If they win a court order to seize your bank accounts they can take money out to the amount they owe, even putting your current bank account into negative if there is funds not there to cover the debt. I would advise shutting all your personal bank accounts to stop this. The best option to completely be safe from this would be to shut all bank accounts you have and convert your money into cryptoCurrency - you don't necessary have to put buy bitcoin but there is stable coins out thier that are pegged to the usd $1 one for one for example tether,usdc,gemini,TrueUSD and paxo are my favorites - this will gave you the ultimate privacy and protection of your Money and make it untouchable to debt collectors or even the government as crypto uses blockchain technology and is decentralised and is not regulated by any government body. You can buy cryptocurrency here - Binance is the Number 1 crypto exchange in the world - however once you purchase your crypto you should store it in cold storage using a hardware wallet like trezor and ledger are the 2 leading hardware wallets - never leave your money on the exchange, simply use the exchange to convert your fiat for crypto, once you have your crypto them move all of it to your hardware wallet for protection and security, I recommend Trezor. Hardware Wallet to store your crypto anonymously and securely
For more inforamtion regarding crypto currency and protecting your wealth using Crypto see our crypto Tab on the left or click here.