Is it permissible for a collections manager to sue a debtor?

A collections manager can indeed sue a debtor, provided they adhere to the legal procedures required and have a valid claim against the debtor. In the context of collections, this legal recourse is available when informal collection methods, such as negotiation or payment plans, have not succeeded in resolving the outstanding debt.

Suing a debtor typically involves filing a complaint in court and following the proper judicial processes. This legal option is an essential part of the collections process because it provides a formal avenue for recovering debts owed when other methods fail. Therefore, as long as the collections manager ensures that they are following state regulations and have substantiated their claim, litigation is a permissible way to seek resolution.

The other choices do not accurately reflect the legal options available to collections managers. Specifically, suggesting that they can only use out-of-court methods or that a debtor’s agreement is needed for a lawsuit does not align with the rights of creditors to pursue debts through the courts when necessary. Additionally, stating that suing a debtor is illegal in Michigan is incorrect, as lawsuits can be pursued if properly justified and conducted in accordance with the laws governing collections and debt recovery.