What to Do When Creditors Threaten Legal Action

Creditors Are Threatening Legal Action: Here’s What To Do

Are you struggling with creditors who are threatening to pursue a legal course of action?

This guide will tell you everything you need to know about handling a situation like this.

If you owe money you will always be feeling incredibly stressed.

This can be made worse when your creditors start to take drastic action to get the money that they are owed back.

Many people who are in debt feel as though they are constantly being harassed by their creditors from letters to phone calls.

The sad truth is that stress is the point.

They are trying to make you feel so stressed that you do whatever it takes to repay the money and eventually they will threaten you with legal action.

The good news is that there are options available to you here.

It all starts by knowing the rights that you currently hold.

What Are The Rights Here?

First, it’s important to be aware that a creditor is usually going to maintain legal action as a scare tactic and nothing more.

They aren’t really going to pursue a court action because this takes time, effort and money.

It’s far easier to continue to harass you.

However, in some cases the threat can turn into action as they will go to court to get a judgement order.

This could result in anything from a wage garnishment to a total freeze on your bank account.

Be aware that if a creditor takes this action without a court order, they are breaking the law.

They should also not claim to be from a legal department if they are not.

They should definitely not make you think that you are speaking to a lawyer when they contact you.

If you do receive official information about legal action against you from a creditor, it’s important that you respond.

You should not ignore or avoid this type of action.

That could lead to a judge automatically granting the action that the creditor is seeking.

Make sure that you do attend the court hearings and argue your case.

Can You Gain Protection

You might want the legal actions and the threats from creditors to cease completely.

Is this possible?

Well, it is if you take the right measures and there are two options available to you.

You can either opt for a consumer proposal or file for bankruptcy.

Both will provide a legal stay of proceedings.

This will stop any creditor from taking any further legal action against you to claim the money that they are owed.

What If Legal Action Has Already Been Granted?

It’s possible that you are in a position where legal action has already begun.

For instance, you might find that the court has granted a wage garnishment.

In some cases, this could mean that 50% of your income is slashed to repay the debts that you owe to creditors.

As well as damaging your professional reputation, this can leave you with fewer funds than you need to pay other bills.

In a situation like this, you still have options available to you.

For instance, you can still think about filing either a consumer proposal or bankruptcy.

Both will provide you with the relief you need in this situation and ensure something like a wage garnishment does cease.

Be aware that certain debts that you owe are exempt including child support.

Alternatively, you might want to attempt to make a deal with the creditor.

You could try and come to an arrangement that benefits you and them based on your financial situation and how much you can afford to pay.

This is usually fairly unlikely because, by the time a creditor starts taking legal action, they have exhausted all other options.

If you haven’t responded, it’s probably because you couldn’t afford to meet their demands.

This is why going through the official channels will often be the best choice.

Get The Help You Need

When you’re facing legal action, it can be difficult to know how to proceed and what the right steps are to take.

But we can help here.

We’ll provide the right support and ensure that all your questions are answered.

The aim will be to ensure that you know all the options available to you and that you are provided the best protection.

Legal action can seem like a nightmare, but with the right support, you can gain the relief you desperately require and get your financial situation back on track.