What happens if you're sued while enrolled in a debt forgiveness program?
Summary
If you are enrolled in a debt forgiveness program, a creditor can still sue you to collect the debt. Being in the program does not stop lawsuits, and you must respond to any court cases; otherwise, the creditor might get a judgment that allows them to take wages or property.Key Facts
- Debt forgiveness programs help reduce what you owe, often by 30% to 50%, but the process can take months.
- Creditors can file lawsuits even if you are enrolled in a debt forgiveness program because it is a negotiation, not legal protection.
- During the program, you usually save money to make settlement offers, but interest and fees may keep adding to your debt.
- If sued, you must respond to the court by deadlines; ignoring the lawsuit can lead to a default judgment against you.
- A judgment may allow creditors to collect money by garnishing wages, freezing bank accounts, or placing liens on property.
- Debt forgiveness negotiations can continue after a lawsuit is filed and might still stop the creditor from getting a judgment.
- Debt relief companies may offer guidance but usually do not represent you in court.
- It is important to deal with the lawsuit promptly to avoid additional legal consequences.
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