When you fall behind on payments, the credit card
company may or may not sue you depending upon the amount you owe.
Credit card companies usually file a lawsuit when you are at least 4 to
6 months past due. To avoid being sued, contact your creditors and
negotiate a payment plan you can afford. If your creditors refuse to
negotiate with you contact a debt solutions company. They will be able
to setup a payment plan with your creditors. A leader in the debt
solutions industry is www.debtsolutionsusa.com . Debt Solutions USA is
an A+ Rated company and is BBB Approved and Accredited . This does not
always stop a lawsuit but the creditor is less likely to sue when a
payment plan has been established. Click here for debt help Debt
Solutions Guide to Managing Debt
Do credit card companies actually sue debtors?
In most cases, Yes. They then tack on the cost of the lawsuit to your
bill. Certain credit card companies are more prone to taking legal
action when they feel that debtors are trying to escape their credit
card payments. But if the Statute
of Limitations on your debt account expires, you cannot be
sued for credit card debts. The Statute of Limitations (SOL) varies
from one state to another. It can be different for each type of debt
account. If your account is past the (SOL) and the collection company
is trying to get you to make a payment, Do NOT make any payments. Even
a $1.00 payment can restart the statute time period. Once you are past
the SOL the creditor can not sue you for that debt. Legally you no
longer owe the money. It will be removed off your credit report 7 years
from the last payment or purchase activity on the account.
What happens if you are sued for credit card
debts?
If the account is yours, the credit card company in most cases will win
the lawsuit and obtain a judgment against you from the court. Through
the judgment, the court orders you to pay off credit card bills. The
judgment order gives your credit card company the right to seize funds
out of your bank account, garnish your wages and a host of other
collection actions depending on your state. Some states such as Texas,
do not allow wage garnishment unless it is the only way out for a
creditor to execute a judgment. States which do not allow garnishment
may seize your bank accounts (also joint accounts) and sell off
non-exempt property or place a lien on your property. However, such
states cannot initiate a forced sale of your primary residence. In
community property states like Texas, if you are sued for credit card
debts, your creditor can seize joint marital property or place a lien
against it even though your spouse may not have her name on the debt
account.
Being sued for credit card debts - How do you
get out of it?
Here are some options you may want to use when you're sued over credit
card debt.
Use SOL defense: If you're
sued for unpaid credit card bills even after the SOL has expired, send
an Expired
SOL Notification Letter to the creditor stating that he
cannot take a legal action against you because your account is well
past the SOL. You will have to show proof of the SOL such as statements
with the dates when your account has been in default and when you have
been charged-off. Copies of your credit report showing the exact date
of default will also serve as proof of the SOL.
Reply to court summons: If the
SOL period hasn't expired and you're sued for credit card debts, then
you would probably receive a court summons, which you need to reply
within a certain time period. The duration for replying to a summons
varies from state to state. Check the summons or warrant for the reply
response time limitation.
Answer a summons or warrant:
You need to file a document (known as "Answer") with the court. In the
Answer, you can dispute the allegations brought about by your credit
card company. You need to send a copy of the Answer to the attorney
representing the creditor. The copy should be sent by Certified Mail
with a Return Receipt Request. Never send originals.When you reply to
the summons, it prevents your creditor from getting a default judgment
from the court. Replying to the summons gives you additional time to
negotiate with your creditor and/or file for bankruptcy.
Appear in Court: If
you are sued for credit card debts , make sure you show up for your
court date. Do not skip it or you will receive a default judgment. Ask
the court if they would arrange for a negotiation with your creditors.
The judge may order the creditor to offer you an affordable payment
plan so as to put the lawsuit on hold. This will give you the
opportunity to pay as much as you can and creditors will not be able to
continue with the lawsuit in court.
Bankruptcy: If you
have other debts, we highly recommend you speak with at least 2
bankruptcy attorneys. The consultations are free. Do not wait to speak
with an attorney because you need to find out what your rights and
options are. In most states once you obtain a judgment you can not
include that judgment into a bankruptcy. So be very careful how you
deal with a summons or warrant.
Sued for credit card debts - how does it
affect your credit score?
When you're sued and the creditor receive a judgment order, it stays on
your credit report for 7 years from the judgment filing date. This can
bring your credit score down by 50-100 points thereby making it
difficult for you to qualify for credit. If you do not pay the judgment
amount, it can get even worse. Unpaid judgments are renewed for an
indefinite period of time even if you do not have the funds to make
payments. So, the best way to avoid such legal action is to negotiate a
payment plan or settlement with your creditor. You should also check
with a bankruptcy attorney in your area to find out what your rights
and/or options are.
Article Source:
http://www.articlesbase.com/debt-consolidation-articles/debt-
solutions-can-you-be-sued-for-credit-card-debt-2753905.html About the Author
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