Credit Card Company Suing You? How to Respond
Maybe you have been living paycheck to paycheck and use a credit card like so many others. Maybe some event like a medical problem or a job loss occurred, sending you into financial turmoil. Now the debts have piled up, and creditors have been calling to demand payment. Suddenly you find yourself being served with summons for a lawsuit by the credit card company. Calm down. Before you start considering bankruptcy options, see what you can do about the lawsuit.
First of all, take the lawsuit seriously. It is something that can have major consequences and requires your urgent attention. There is a deadline by when you have to respond to the suit. If you do not meet that deadline, the court will enter a default judgment against you, awarding the credit card company access to means such as garnishing your wages, placing a lien on your house or a levy on your bank account to collect whatever they claim you owe them. In some extreme cases, the court may even order a ‘bench warrant’ or a ‘writ of attachment’ against you if you miss a date. Such an order means the court can now order your arrest. So, don’t ignore the summons and file a response by the deadline.
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Go through the credit card company’s claim thoroughly. If you need more time to do so, you can file a Motion for Extension of Time – it should get you about a month extra to prepare your response.
Ensure that you actually owe the debt that the company is claiming you owe. Also check whether the statute of limitations hasn’t already passed on the debt. Make sure that the company has attached all relevant documents to prove the agreement between you and the company, and to prove the sum they claim you owe. If the company has overlooked any of these details, you can file a Motion to Dismiss the lawsuit.
In case you file a Motion to Dismiss and it is rejected by the court, you need to produce your answer. Go through Federal laws like the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. If your creditor has violated provisions of either of these Acts, they actually become liable to pay you a fine. So if you can find any violations, you can bring them to the negotiating table.
In the end, the negotiating table is the best place for you to work on the debt with the creditor. By now, they must have understood that you aren’t just going to roll over because they filed a suit; they are going to have to fight it, which will cost them more money as well. They also know that you have bankruptcy options that can shatter their chances of recovering anything.
Prepare all documents relevant to your financial condition including your wage slip, any medical bills, your saving and loan accounts, etc. Take them to your creditor and show them what you can afford to pay and what kind of regular payments plan can you work with. You can even ask the court to arbitrate between the two of you.
Settle the lawsuit. It is in the best interests of both the parties. Just make sure you get whatever is agreed upon in writing. This is important in case you ever need to produce documentary evidence in the future. Honor the new agreement and pay off your debt; it would be a shame to end up back in court.
