Can Credit Cards Sue You and What to Do

If a credit card company decides to sue you, it can be a stressful and overwhelming experience. In the US, credit card companies can sue you for non-payment, but they must follow the law.

You can't be sued for simply making a late payment, but repeated late payments or a large outstanding balance can lead to a lawsuit. Credit card companies can't just sue you without giving you notice first.

The notice will typically include the amount you owe, the interest rate, and any fees associated with the debt. You'll also be given a chance to dispute the charges or come to a payment arrangement.

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Credit card companies and other lenders are in business to make money, so they expect to be paid back when you use a credit card to rack up debt. If you miss a payment, you'll likely be shown some patience initially, but things might turn more aggressive if you fail to pay your bill for several months.

Your credit card company may report your lack of payment to a credit-reporting agency, causing your credit score to take a hit. This can happen if you've already been shown some patience and the lender decides to throw in the towel and label your debt a "charge-off".

It's possible you'll be sued for the debt at this point, but it's just as likely that the lender will turn to a debt collector in hopes of getting payment from you. Debt collectors have one job: to get you to pay your debts.

Ignoring calls and letters from your credit card company or a collection agency can be tempting, but this response (or lack of response) can cause the situation to escalate. Around 15% of consumers contacted about a debt in collections are sued in civil court.

You might start to receive calls from a debt collection law firm that may or may not give you one final chance to pay or settle your credit card debt. If you don't work something out that will satisfy the creditor, the attorney may file a lawsuit against you.

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If you're sued for credit card debt, it's essential to take immediate action to protect your rights. An attorney can handle this process for you, so consider setting up an initial consultation before taking any actions on your own.

Debt collection lawsuits are a common and efficient tactic, with debt cases making up 42% of civil cases in nine states in 2021. A creditor or collection agency typically files a complaint with a state civil court, listing you as a defendant and your co-signer if you have one.

The complaint will specify why the creditor is suing you and what it wants, usually the money you owe plus interest, and maybe attorney fees and court costs. This information will be delivered to you, along with a court summons, which outlines the date and time of your court hearing.

Responding to the complaint and summons is crucial, as failure to do so can result in a default judgment. A default judgment allows the creditor to take severe actions, including:

Ignoring a debt collection lawsuit can lead to serious consequences, including losing the case by default and having your wages or bank account garnished. You can lose the case by default if you don't respond to the lawsuit.

To defend yourself, you should respond to the lawsuit as soon as possible. If you can't afford a lawyer, consider hiring one to ensure you're putting your best foot forward in the case. Studies have found that people who hire an attorney tend to fare much better.

If you can't afford a lawyer, find a legal aid organization in your community that will take up your case. You can also try to negotiate a settlement with the creditor or debt collector. Keep in mind that creditors are more willing to work with you if they see documented evidence of financial hardship.

You can also challenge the lawsuit if it's over 4 years from your last payment or promise to pay. The creditor must send you a written demand for payment at least 30 days before filing a lawsuit. If you don't owe the debt or the amount is wrong, reply to the demand letter within 30 days.

If you're facing a lawsuit from a credit card company or debt collector, it's essential to consult an attorney. An attorney can help you negotiate a settlement, answer a complaint, craft a defense, and represent you in court.

An attorney can point out defenses you weren't aware of and help you write a more complete response, making the creditor more likely to pursue a deal with you.

You may have to pay a fee to file your response, but you can ask the court clerk about fee waivers if you can't afford the fee.

An attorney can also help you determine if the debt in question was already paid, if the statute of limitations has run out, if the debt collector violated the FDCPA, if you're the victim of identity theft, or if you've filed for bankruptcy.

Free or low-cost legal representation may be available through a legal aid program or clinic to help you. Military service members can get help from their local judge advocate general office.

Here are some ways an attorney can help you:

Responding to a lawsuit can be a daunting task, but it's essential to take it seriously. Ignoring the lawsuit can lead to severe consequences, including losing the case by default and having your wages or bank account garnished.

The creditor may also place a lien on your home, and you'll be ordered to pay the debt, collection costs, interest costs, and attorney's fees. This can result in owing more than the original debt.

You'll receive a summons with important information about the lawsuit, including the amount owed, the date of the hearing, and how to file a formal response. Don't ignore the summons, as you can go to jail for ignoring a court summons.

Consulting an attorney can help you navigate the process and write a more complete response. They can point out defenses you weren't aware of and represent you in court if necessary.

If you can't afford an attorney, consider reaching out to a legal aid organization or your local judge advocate general office for low- or no-cost services. You may also have to pay a fee to file your response, but ask the court clerk about fee waivers if you can't afford it.

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Here's a summary of the steps to take when responding to a lawsuit:

You might be wondering what happens if you ignore a credit card lawsuit. Unfortunately, ignoring the lawsuit is not a good idea. The creditor will simply proceed without you, and you may lose the case by default.

If you lose, you'll be ordered to pay the debt, and your wages or bank account could be garnished. You may also be ordered to pay the plaintiff's collection costs, interest costs, and attorney's fees, which can add up quickly.

Here are some possible consequences of ignoring a debt collection lawsuit:

It's essential to respond to the complaint and summons, even if you can't afford a lawyer. You can find a legal aid organization in your community that may take up your case.

If you incurred a debt, but think you shouldn't have to pay, there are a few instances where you might have standing to refuse to pay.

You might have a valid affirmative defense, which is a defense that provides supporting evidence for the defendant, and if the evidence proves credible, it will negate criminal or civil liability.

Some examples of affirmative defenses for a debt case include:

If you think you might have one of these defenses, seek legal advice on the best way to proceed.

If you're sued for debt, the consequences can be severe. You may lose the case by default, which means you'll be ordered to pay the debt, and your wages or bank account could be garnished.

A debt collection lawsuit can result in you owing more than the original debt, including collection costs, interest, and attorney's fees.

You can't afford to ignore a lawsuit, as the creditor will win by default and can get a court judgment against you. This can lead to your property being seized.

The creditor may attempt to garnish your wages, place a lien on your property, or freeze your bank account.

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Here are some potential consequences of being sued for debt:

If you're not judgment proof, you may be ordered to pay the debt, even if it's more than you can afford. Credit counseling can help with negotiations to try to reach a payment agreement with the creditor.

Paying your credit card bill on time is the best way to avoid a lawsuit, but if you're having trouble, don't ignore the issue. You can try to work out a debt repayment plan or negotiate a settlement with your lender or debt collector.

If you can't afford to hire a lawyer, look for a legal aid organization in your community that can take up your case. Many people who are sued by debt collectors fare much better with the help of an attorney.

If you're being sued, you can challenge the debt if it's over 4 years from your last payment or promise to pay. The creditor must send you a written demand for payment at least 30 days before filing a lawsuit against you.

You have a legal right to ask for a copy of the creditor contract to make the collection agency prove that they have the authority to collect the debt. This can often be enough to make the collection agency stop their efforts.

Here are some key deadlines to keep in mind:

Ignoring a debt collection lawsuit can put your wages, bank account, or property at risk, and you can also lose the ability to dispute that you owe the debt.