One major reason people decide not to use a debt settlement service is that the fear getting sued by their creditors. The reality of these fears is here examined.

When a person enrolls’ in debt settlement it is a necessity that they stop paying their creditors as creditors who are getting paid regularly are, understandably, not willing to settle. This results in a chain reaction of sorts where credit damage is done and debts often go into collections. Most collectors hold the debts and try to collect and after a certain period of time they might sell the debt to a legal office collection agency in the client’s state and can take court proceeding against the client. Successful lawsuit can easily lead to wage garnishment, further credit damage, and even a lien being placed on one’s home.

Two main factors determine whether a civil lawsuit occurs and when. One is time. Creditors only have a limited amount of time to sue someone over debts. Each state has its own “statute of limitations” for these debts (these statutes can be found online very easily) ranging from 3 to 15 years. Creditors start going the lawsuit path once these deadlines approach. This is why a shorter debt settlement program is better than a longer one. Another variable that makes court action happen more quickly is the creditor deciding that the client is relatively easy to get money out of and that legal action would be successful in accomplishing this. This is one huge reason why clients should not speak to creditors as they seek to elicit information which is used to decide whether or not to sue the client. A well informed creditor does not lead to a low settlement in most cases unless the reality is very very bad and bankruptcy is looming.

Even if worst case scenario happens and a debt settlement client is issued a summons this is not the final “end-game”. No one, including the creditors wants to go to court. In most cases they are willing to settle. Settlements at this pint would be in the 70% range but still a client can save money even at this late stage. If worse comes to worse the bankruptcy option is always on the table but should be used only as a last resort.