It’s a story that plays out all the time: People fall behind on credit card debts, can’t pay back collectors and find themselves in a situation where they are possibly facing a lawsuit.
Studies show nearly 98% of all people who get sued for a credit card debt, take no action whatsoever. In doing so, collectors can get a default judgment against you. With that they can force payment from the debtor through wage garnishments, bank account levies, property levies, and other ways.
People generally seek out ways to resolve the matter, or figure there’s nothing left to do. Some end up filing for bankruptcy to clear the debt or pay it off over a period of time.
Doing nothing is not the answer.
If you are sued for a credit card debt take these steps to ensure you get the best possible outcome:
- First identify if there were any service issues. Look at the complaint and identify who’s being sued; this should be your name.
- Take notice to the date, time, and how you received the papers.
- Review the claims. Read the complaint carefully to ensure that the debt belongs to you, and it will give you information about the original creditor. Look at the value of the claim. If this is something you can afford to pay off, work out a way to structure payments with the credit card company to avoid the cost of an attorney or potential litigation.
- Responding in a timely manner. Defendant’s response to the plaintiff’s complaint must be filed within 30 days of being served. Seek legal help if necessary to ensure the right steps are being taken.
- You aren’t legally required to have a lawyer represent you in court, but it is important to gather all necessary information and seeing if you have any valid defenses. Remember, it is up to the plaintiff to prove what they are claiming before the court.
- Whether you hire an attorney or go alone, you must file papers within the period of time provided under the law. You also must appear at scheduled court hearings.
- Look at whether bankruptcy is a viable option to discharge the debt.
No one wants to deal with a lawsuit for a debt, but try to keep it in perspective, and focus on resolving it with the best possible outcome. Our advice is to look at this as an opportunity to negotiate with the collector and work out an affordable solution that will benefit both parties and avoid legal parameters.