What should I do if I am sued for credit card debt?

When negotiating a collection lawsuit on a credit card debt with your original creditor you can settle with a lump sum amount of money, or set up monthly payments you can afford on the balance.

Why are there so many credit card lawsuits?

Many people think debt buyers prefer to avoid lawsuits to collect old credit card debts because it requires them to pay lawyers and incur costs of litigation. If this were true, however, credit card lawsuits would be far less common than is the case. In fact, there were nearly 200,000 credit card collection lawsuits filed in New York in 2011 alone.

Can a credit card company sue a delinquent person?

If you’re delinquent on your credit card payments, the credit card company or a debt collector hired by the credit card company might sue you to recover the money you owe. When you originally obtained the credit card, you signed an agreement either electronically or in writing.

What happens if you fail to settle a credit card debt?

If you fail to settle the debt with the debt collector, it might be sold and resold again. Eventually, a collector will probably refer the debt to an attorney’s office to initiate a lawsuit. Once your debt reaches the debt collection law firm, the attorney will usually give you one last chance to settle the debt to avoid a lawsuit.

Can you be taken to court for credit card debt?

If the time the law allows to collect the debt has passed, the creditor can no longer take you to court. Although credit card debt that is older than the statute of limitations is not collectible, the statute of limitations varies by state. Even if the statute in your state expires, the bad debt may still appear on your credit report.

What to do if a creditor Sue you for debt?

Steps Determine if the creditor is acting within legal guidelines. Business debt. Take action against harassing creditors. If you find that the creditor is not acting inside the law, then you may take steps to hold the creditor accountable for illegal Work with the creditor to clear your debt.

What happens when your credit card company sues you?

While your liability should be clear if your credit card company sues you directly, sometimes it’s not that straightforward. Debt collectors you’ve never heard of can purchase your debt and sue you for it, and the debt may be inflated by fees and penalties. Mistakes or outright fraud can happen.

Should you refinance to pay credit card debt?

Depending on how much you owe, refinancing to pay off your credit cards may simply prolong the amount of time you remain in debt and the amount of interest you’re paying on it. Depending on what your goal is, using a refinance to pay down your credit card debt might be a good option.

What happens to unpaid debt after a lawsuit is filed?

Unpaid debt doesn’t just go away. It continues to be reported on your credit report, harming your credit score, and leaving you at risk of potentially being sued. A debt collection lawsuit commences when the law firm that represents your creditor files a case against you in civil court.

What happens if you refuse to pay your credit card?

Simply refusing to pay your credit card debt won’t land you in prison – but it might seem that way because of the damaging effect it can have on your future. Failure to pay off your credit cards can have far-ranging repercussions on your credit report, career path and monthly payments of other bills. Tips.

When negotiating a collection lawsuit on a credit card debt with your original creditor you can settle with a lump sum amount of money, or set up monthly payments you can afford on the balance.

What happens if you ignore a credit card debt summons?

If you ignore your summons, the court is likely to rule in the debt collector’s favor and your wages could be garnished until you pay back the amount of money that the court rules you owe. If you are sued for credit card debt, your first step is to verify that the debt is actually yours.

Can a person go to jail for credit card debt?

Suing someone over an old debt is the last step in the debt delinquency timeline, not the first one. Here’s the good news- you can’t go to jail for credit card debt, and if a debt collector implies…

What happens when you get sued for credit card debt?

By the time an unpaid debt turns into a court summons, it has already passed from the initial creditor to at least one debt collection agency. Sometimes your debt has been handled by multiple debt collection agencies, each one selling or passing your debt along until one of the agencies decides to take you to court.

How do you settle a credit card debt?

Debt buyers settle credit card debts they own for less than the total you owe on the account. They will either collect debts using in house debt collectors, assign accounts to a subsidiary collection agency, hire another debt collection firm, or place accounts with attorney debt collection law firms they have relationships with.

When to settle an old credit card bill?

Settling an old credit card bill when you are sued by an attorney hired by a debt buyer. Debt buyers, the debt collectors and collection law firms they hire, use some similar criteria to identify who they will sue in order to try to get paid.

What are the defenses to credit card debt lawsuits?

It requires collectors to provide you with validation of your debt when you request it and stop collection activities until they do. It prohibits certain collection activities such as threatening to sue on debt that is beyond the statute of limitations.