Utah Debt So you all know how it works, your bank or other creditors sell your debt to a collection agency for pennies. The collection agency does everything to settle the debt because as long as they get something, they're making money. Collection agencies make more money off default judgments than anything, and if the debt is a minimal amount, people will generally just pay it, whether they actually owe it or not.
Default Judgments
A default judgment is when a court gives a judgment by, you guessed it, default. Typically this occurs when a party does not answer a complaint, or at some point they simply ignore the law suit. Once it becomes apparent that a party is not responding to pleadings or taking any steps to defend himself/herself, the court can simply grant a judgment in favor of the opposing party, and give them anything they asked for. With a judgment, the prevailing party can garnish wages, garnish bank accounts, force a sheriff's sale of personal property, etc. Collection agencies probably resolve most of their cases by getting a default judgment against debtors.
Is my alleged debt worth fighting over?
Fighting Utah Collection Agencies I've met with numerous clients that come in with a collection letter for a $200 debt that they did not incur. Many of them are upset and ready to fight tooth and nail, but once they realize the time it is going to take to contest the debt, or the money they are going to have to spend, they seldom keep that motivation to fight. I don't recall ever having someone in that situation actually hire me to fight the collection agency.
It is frustrating to those clients that creditors can get away with this type of behavior, but unfortunately to the creditor its just a numbers game. Even if people do put up a fight on occasion, the vast majority just pay the money. In Utah, unless the debtor can prove that the attempt to collect the "debt" was malicious and the creditor knew that the debt was bad, courts generally don't award damages other than the actual damages (time/money spent fighting the bad debt, as long as you can clearly show it). It can be difficult to prove that a creditor intentionally attempted to collect bad debt, in the end a creditor can usually claim it was a innocent error and get away with it unscathed. So while it's great to take a moralistic approach to these types of debt collection practices, from a practical standpoint its often easier to just pay the "debt".
It is frustrating to those clients that creditors can get away with this type of behavior, but unfortunately to the creditor its just a numbers game. Even if people do put up a fight on occasion, the vast majority just pay the money. In Utah, unless the debtor can prove that the attempt to collect the "debt" was malicious and the creditor knew that the debt was bad, courts generally don't award damages other than the actual damages (time/money spent fighting the bad debt, as long as you can clearly show it). It can be difficult to prove that a creditor intentionally attempted to collect bad debt, in the end a creditor can usually claim it was a innocent error and get away with it unscathed. So while it's great to take a moralistic approach to these types of debt collection practices, from a practical standpoint its often easier to just pay the "debt".
Significant Utah Debt
Significant Utah Debt Having said that, if the debt is significant, then it's probably worth contesting a debt collection lawsuit. Whether a debt is significant is going to vary depending on your situation. Obviously what might be insignificant to one person, might be significant to you. If the debt is significant to you and you decide to litigate, there are a couple things to keep in mind:
First of all, you don't want to admit you owe the money. Even if you are aware that at some point in the past you did incur the debt, if you admit it then case over, the judge (if it comes to that) will have no choice but to rule in favor of the creditor. On the other hand, if you deny incurring the debt, then you can compel the collection agency to provide proof that the debt was incurred, and prove how much debt was incurred. Often times they can't do this, especially if they are the 2nd or 3rd company to handle the debt, and instead they hope for either a default judgment, or a settlement before they are forced them to provide such information.
Second, force the collection agency to provide verification that the debt was incurred, and how much. Again, whether you actually incurred the debt or not, if the creditor can't prove that you did, the judge can't order that you pay the money, unless you admit that you incurred the debt. I'd recommend getting at least that far in the process before settling. If the creditor can't provide the necessary proof, then its probably worth taking it to trial, or settling for a nominal sum. If the creditor can prove the debt was incurred by you, then you definitely don't want to go to trial, instead try to settle the case for a lower amount.
If you are drowning in debt and creditors are not working with you, or they are dragging payments on for years and years, Utah bankruptcy is always an option as well. You can discuss this possibility with your Utah bankruptcy attorney.
Call Pearson Law Firm for a free consultation with experienced Utah debt defense attorney Jared B. Pearson, he will be happy to discuss your options with you and determine the best course of action. Call today! 801-888-0991
First of all, you don't want to admit you owe the money. Even if you are aware that at some point in the past you did incur the debt, if you admit it then case over, the judge (if it comes to that) will have no choice but to rule in favor of the creditor. On the other hand, if you deny incurring the debt, then you can compel the collection agency to provide proof that the debt was incurred, and prove how much debt was incurred. Often times they can't do this, especially if they are the 2nd or 3rd company to handle the debt, and instead they hope for either a default judgment, or a settlement before they are forced them to provide such information.
Second, force the collection agency to provide verification that the debt was incurred, and how much. Again, whether you actually incurred the debt or not, if the creditor can't prove that you did, the judge can't order that you pay the money, unless you admit that you incurred the debt. I'd recommend getting at least that far in the process before settling. If the creditor can't provide the necessary proof, then its probably worth taking it to trial, or settling for a nominal sum. If the creditor can prove the debt was incurred by you, then you definitely don't want to go to trial, instead try to settle the case for a lower amount.
If you are drowning in debt and creditors are not working with you, or they are dragging payments on for years and years, Utah bankruptcy is always an option as well. You can discuss this possibility with your Utah bankruptcy attorney.
Call Pearson Law Firm for a free consultation with experienced Utah debt defense attorney Jared B. Pearson, he will be happy to discuss your options with you and determine the best course of action. Call today! 801-888-0991
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