How Often Do Debt Collectors Take You to Court?

If you’ve ever been behind on your bills, you may have had debt collectors call you asking for payment. While these calls can be stressful, most debt collectors don’t take things any further than a phone call or two. In fact, according to The Balance, less than 1% of debt cases ever end up in court.

So, how do debt collectors collect on debts? The most common method is through something called negotiation.

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This is where the debt collector will contact you and try to work out a payment plan that’s agreeable to both parties. If you’re able to come to an agreement, you’ll likely sign a contract outlining the terms of your repayment.

What happens if the negotiation doesn’t work?

If negotiation doesn’t work, the next step is often sending your account to a collection agency. These agencies purchase debt from creditors for a fraction of the original amount owed and then attempt to collect the full amount from the debtor.

Collection agencies have more leeway when it comes to collecting debts, so they may use aggressive tactics like frequent phone calls or even public shaming. However, taking someone to court is still relatively rare.

There are a few reasons for this.

  • First, it was expensive. It can cost a creditor thousands of dollars in legal fees to file a lawsuit and even more if they win and have to collect on the judgment.
  • Second, it’s time-consuming. A lawsuit can take months or even years to resolve, and during that time, the creditor isn’t collecting any payments on the debt.
  • Finally, there’s no guarantee that the creditor will win their case. If they don’t, they’re out all of the money they spent on legal fees with nothing to show for it.

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Final words

While debt collectors have a reputation for being relentless in their pursuit of payments, the truth is that very few cases ever end up in court.

Most creditors would rather work out a payment plan with you or send your account to a collection agency than go through the expense and hassle of taking you to court.

However, if you’re unable or unwilling to pay your debts, creditors do have the option of suing you—although it’s not an option they take lightly.

Maddison Cox

Maddison Cox is a writer who loves nothing more than watching Rafael Nadal play tennis. She also enjoys reading books, and will read just about anything that comes her way. Maddison likes to spend quality time with herself, whether that's exploring new places or simply relaxing at home. Do you want to read more about Maddison? Connect with her on LinkedIn.

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