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Why You Should Always Fight A Credit Card Lawsuit

You can roll over and play dead when it comes to a credit card lawsuit. But what if just a little effort could get you a major win?

I’ve seen thousands of people with judgments from the credit card company that filed a lawsuit against them.  Rather than contend with the difficulties of mounting a defense, my clients – smart, honest folks – did nothing.  As a result, they ended up in my office with garnishments, bank account freezes, and worse.

When I ask, they tell me they didn’t fight because they didn’t see the point of doing so.  The credit card company had more money, better lawyers, and seemingly deeper pockets.

Why fight a credit lawsuit?  It’s simple, really.

The Other Side Is Unprepared

Most law firms that represent credit card companies in lawsuits do no more advance planning than getting a computer file and dumping the information into a form Complaint to be sent off to the court.  Whether the lawsuit is to be filed in Los Angeles, Pasadena, Brooklyn or the Bronx it’s all the same – the lawyer spits out the document, gets it filed, and hopes that you do nothing.

If you decide to fight the credit card lawsuit, however, they’re totally unprepared for you.  Suddenly, someone’s got to dig up a bunch of documents to prove up the case.  They’ve got to send lawyers to court.  They need to (gasp) read your Answer and other documents in order to figure out how to battle you.

All this takes time.  Lots of it.  And that’s at a premium, because …

Credit Card Lawyers Are Overburdened

Each law firm files thousands of these cases each year, which is far more than they can reasonably handle – unless it’s reduced to a simple assembly-line cranking out documents on one side, default judgments on the other.  All it takes is a printer and a few administrative employees to push that much paper through the door.

The business model is based on most people defaulting on the credit card lawsuit so that they lawyers can begin a garnishment or freeze your bank account.  High-volume, low-maintenance, high-profit.

Once you stand up to fight, you’ve gotten in the way of a good thing.  They need to do something to shut you down.  Which is difficult, because …

Credit Card Lawsuits Are Filled With Problems

Credit card debts are sold repeatedly before a lawsuit is started against you.  As we’ve discussed in the past, most of the time these sale transactions occur without any documentation being passed from seller to buyer.  By the time someone files a lawsuit, the paperwork is nowhere to be found.

Consequently, you can’t rely on what they say in the Complaint.  Who really owns the debt?  How did they calculate the balance due, and is it correct?  Did they sue in the time period allowed by the law?  Which state’s laws control the credit card agreement?

They don’t know.  Of course, they could find out.  But why bother when …

Settlement Or Dismissal Looks Like A Pretty Good Idea

It’s like a poker game.  Sue and get a default – a winner!  Do it thousands of times a year – major winner!

But spin the wheel and get someone who is willing to fight the credit card lawsuit?  Cut your losses and either settle or dismiss the case entirely.

In the Right Hands, A Fight Is A Better Idea

If you get sued by a credit card company, you can do nothing and face the consequences.  Or you can call a lawyer who knows how to defend the case and get a better result.

Which sounds like a better idea to you?

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By |December 6th, 2012|

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.
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