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10 Steps To Take If You’re Sued For A Credit Card Debt

By |September 4th, 2015|

The doorbell rings, and there’s a strange guy standing there. He asks for you by name, hands you some documents, and walks away.

Congratulations, you’re being sued.

It’s a story that plays out thousands of times a day. People fall behind on credit card debts, can’t pay the collectors, and find themselves named as defendants in collection lawsuits.

This happens so often that some law firms do nothing but sue consumers for past due debts. Huge operations, these firms file thousands of lawsuits every day.


Suing For Credit Card Debts Is Big Business

The business model is simple – file a lot of collection lawsuits with the expectation that most people will do nothing so the law firm can get a default judgment. With a default judgment in hand, the collection lawyer can force payment through wage garnishments, bank account levies, and more.

It’s a profitable model for these collection lawyers. In fact, nearly 98% of all people who get sued for a credit card debt take no action whatsoever. Some people are confused about what to do, others simply shrug and figure there’s nothing they can do.

A few end up filing for bankruptcy to either wipe out the debt or pay it off over time.


Doing Nothing Is A Terrible Idea

When a lawyer sues you, all they need to do is make a claim that you owe money. They don’t need to come up with much evidence in order to support that claim – that’s the way the law is written.

You, as the defendant, have the right to challenge the lawyer’s claims and raise any defenses you may have. You are also allowed to make any claims you may have against the creditor, as well as any reasons why you shouldn’t be held responsible for the debt even if all of the claims are correct.

But there’s a limited amount of time for you to make those challenges. Once the clock runs out, you no longer have the right to bring them up.

Any protections you may have had go out the window, and you’re left legally liable for whatever the lawyers claim you owe.


If You’re Sued For A Credit Card Debt, Take These Steps

Lucky for you, you’re not going to do nothing about the lawsuit. You’re going to stand up for your rights, throw down the gauntlet, and force the credit card company’s lawyers to prove every claim they’ve made against you. Maybe you’ll win, maybe you’ll lose – either way, you’re going to make them earn every penny they’re trying to get from you.

Here’s what you’re going to do.

  1. Don’t panic. Nothing terrible is going to happen to you so long as you keep on top of the situation.
  2. Identify who’s suing you. This is the name you’ll see before the word, “Plaintiff.”
  3. Identify who’s being sued. This should be your name. If your name doesn’t appear here then you’re not being sued. If someone else’s name appears with yours, that person is also being sued – you should have a talk with them abut what’s going on.
  4. Note the name of the law firm representing the Plaintiff. These are the people you need to communicate with from now on. The creditor won’t communicate with you directly anymore (that’s why they hired the lawyers).
  5. Write down the date, time, and how you got the papers. Remember, you’ve got a limited amount of time to do anything about the lawsuit before the court enters a judgment against you. Better to know when the clock starts running than to guess about it later on.
  6. Review the claims. You’ll want to read the Complaint carefully because it will give you valuable information about the name of the original creditor (the debt may have been sold or transferred, so the Plaintiff may not be the same as the original company) as well as the amount of money they claim you owe.
  7. Organize any documents you have. Go through your files, bank account records, and old mail to get any information you may have about the credit card debt. Even if you don’t think a document is important, it may contain helpful clues.
  8. Get your most recent paystub and tax return. These financial documents will help analyze your ability to pay a settlement or judgment, as well as to understand what you may have at risk in the event of a wage garnishment or bank account freeze.
  9. Talk with a collection lawsuit defense lawyer. You aren’t legally required to have a lawyer represent you in court, but you should make sure to talk with an attorney who practices in the field of collection lawsuit defense. Even if you don’t hire that attorney or decide to go it alone, it’s important that you have all the information you need to figure out if you’ve got any valid defenses or should use the magic words. An attorney will also tell you how long you have to file papers with the court to protect yourself – and what the impact of a judgment will be on you.
  10. Show up. You have to either hire a lawyer or go to court to file papers within the period of time provided for under the law (a phone call to the credit card company’s lawyers won’t protect you). If the court schedules a hearing, you or your lawyer have to appear in the right place and at the right time. When a trial is scheduled, you need to be there as well. If you don’t do what you’re required to do, the creditor wins a judgment against you. That’s why it’s important to always show up – there’s no legal excuse for forgetting to file papers with the court or for failing to hire a debt collection lawsuit defense lawyer on time.


Follow The Rules To Be Treated Fairly

If you fail to follow these guidelines you will lose the case and have a judgment filed against you.

I’m not saying you’ll win the case if you follow these 10 steps – but you will force the credit card company’s lawyers to prove their case and show them you’re not going to let them take advantage of you.

At the very least, your chances of a settlement go up if you take your responsibilities seriously. And in the end, that’s better than a judgment and all it entails.

About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.