What is the approximate cost of litigation in a debt collection case?

Question

I was threatened with litigation by a debt collector and need to know the cost of litigation for negotiations.

Answer 1

congrats! You'll be ordered to pay your debt.

Answer 2

You don't mention the amount nor the source of the collection debt.  If the amount owed is small, the collector will probably not file for legal action.  Some collectors don't have the right to file for suit too.  Keep that in mind.  Generally debt collectors (not attorneys) collect on a contingency basis.  40 - 60 for example.  The collection company keeps 40% & remits 60% to the creditor.

Might want to consider offering a settlement of 50%.  The collector will probably take it.  The creditor would then get 30% and the collector 20%.  A bird in the hand ....

Before agreeing to a settlement, make it part of the deal that upon satisfaction of the debt (even for a lesser amount) the debt will be removed from your credit bureaus file.

And to answer your question - it depends on where you live.  Some states do not allow garnishments on wages.  Period.  

In my state, the attorney I use for collection on contractual debts charges 1/3 of the amount of the initial suit.  Plus the debtor pays all court costs & garnishment fees.  Those fees generally cost $130.

Good luck.

Answer 3

The cost of a defense lawyer? Or the cost of them putting a lawyer in a courtroom? If you're looking for legal help, you'll need to call local attorneys who will consult with you and then give you a fee or rate. If your collector does sue, you will be ordered to pay your back debt, attorney's fees, court fees, and interest. If you don't pay, depending on where you live, they can garnish your wages.

Answer 4

It could vary, but expect a few hundred for lawyer fees and maybe up to a hundred more for the actual court fees.