When you apply for a credit card, you’ll sign a credit card agreement that states you agree to pay your creditor under the terms of the agreement. When you fail to make timely payments or stop paying an account, the creditor may take a variety of steps to obtain the money owed.
The first steps the card company make take include making phone calls to the cardholder, as well as charging extra fees on the account or boosting the overall interest rate. When an account is unpaid for some time, the creditor may take legal action against the debtor or sell the debt to a debt collector and wash its hands of the “bad” account through a tax write-off.
Not only can the original creditor choose to sue a debtor, but a debt buyer who recently bought an overdue account can also choose the legal route. Most debt buyers and original creditors will take months – if not years – before they decide to sue a debtor, and legal action may come if a debtor chooses to ignore the creditor.
When a Creditor Sues You
U.S. News & World Report shares very simply what may occur when a credit card company sues you:
“When your card issuer – or a collection agency that has purchased your debt from the issuer – can’t get you to pay your bill, a lawsuit seeks to obtain a court judgment, which may give the company the right to garnish your wages and bank account until the debt is paid.”
The article goes on to explain that getting sued for a credit card debt by an original creditor or a debt buyer will usually not result in any jail time. If you get sued, there won’t be a debtor’s prison waiting for you as if you were living in 19th century England and were sent to the workhouse to pay off your debts.
While there are some rare circumstances when a civil case may result in a debtor experiencing jail time, those circumstances usually have to do with a debtor (or alleged debtor’s) refusal to respond to an order of the court.
The Number One Rule in Credit Card Lawsuits:
Never ignore a lawsuit.
It doesn’t matter whether you think you can pay your debt or whether you think you can win your lawsuit. It’s essential that you don’t ignore any legal paperwork that you receive.
If you fail to respond to the lawsuit, the creditor will pursue a “default judgment,” which occurs when the defendant doesn’t answer the lawsuit, and the court grants the creditor what it requests in the lawsuit.
Speaking with a lawyer as soon as you learn that a creditor is suing you is the most critical step you can take in defending yourself in a lawsuit. With your lawyer’s help, you may have multiple options available that include settling with your creditor without going to trial or fighting the lawsuit.
In fact, an article from creditcards.com suggests:
“Most creditors would rather settle a case without the hassle of going to court.”
If the creditor who is suing you has a legitimate case against you and can reasonably expect a successful judgment against you, a settlement may give you the opportunity to satisfy the debt with only a modest amount paid.
Do You Have Questions About Credit Card Debts & Lawsuits?
Are credit card companies hounding you for payments? Were you recently served with a lawsuit? Would you like assistance from an experienced lawyer? Contact Suburban Legal Group for more information.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Suburban Legal Group PC shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.