Credit card debt is money owed to a credit card company. It is very common for Americans to have credit card debt. It is also very easy for an individual to get in over their heads by having more credit card debt than they can afford to pay.
What about Paying off Credit Card Debt?
Credit card debt is a type of debt that increases with time. If an individual only pays the minimum payment on their credit card bill each month, they are subjected to interest fees. Those interest fees can have an enormous impact on the amount of debt they actually owe over time.
Credit card companies establish a minimum payment percentage to ensure that the individual does not completely pay off their credit card debt for as long as possible. By only paying the minimum amount, the individual is subjecting themselves to years of payments with large amounts of interest tacked on.
The faster an individual can pay off their credit card bill, the less they will pay in extra interest fees. An excellent budgetary goal for every individual is to pay off their credit card debts completely.
There are several strategies individuals can implement to pay off their debt. This may include consolidating their debts into one monthly payment or paying more than the minimum payment that is required each month. However, in many cases, an individual is simply not able to pay off all of their credit card debt for any number of reasons.
Can I be Sued for Credit Card Debt?
If an individual falls behind on their monthly payments or stops making payments altogether on their credit card, the credit card company may file a lawsuit against them. The credit card company is permitted to file a lawsuit pursuant to the Fair Debt Collection Practices Act.
Prior to filing a lawsuit, an individual’s credit card company will usually close the account or disable the account. During this time, interest charges will continue to be added on the debt the individual has accrued on the credit card.
What Happens in a Credit Card Debt Lawsuit?
Not every lawsuit filed by a credit card company follows the same chain of events. The typical chain of events in a credit card debt lawsuit is as follows:
- The individual breaches their agreement with the credit card company;
- The individual’s credit card company may sell their debt to a debt collector;
- The credit card company sues the individual;
- The individual responds to the credit card company’s lawsuit; and
- The individual attends their court date.
When an individual first receives their credit card, they have signed an agreement. Currently, these agreements are typically in an electronic form, but they may have signed a physical paper.
This agreement outlined the rights and duties of the individual and their credit card company. In most cases, if the individual falls behind on their monthly payments or stops making monthly payments, they have breached their agreement with the credit card company.
If the individual has breached the agreement they signed with the credit card company, the company has the right to sue. If the individual wants to attempt and avoid a lawsuit, they should communicate with their credit card company. They may be able to explain their circumstances and attempt to pay off their debt.
An individual’s credit card company may attempt to sell their debt to a debt collector. This is an attempt by the credit card company to cut their losses.
If the credit card company sells the debt to a debt collector, the debt collector becomes the legal owner of the debt. If it is possible, an individual should attempt to settle their debt with the debt collector in order to avoid a lawsuit.
If an individual fails to settle their debt with the credit card company or with the debt collector, the credit card company may sue the individual. The credit card company or debt collector will file a complaint which will explain why they are suing the individual and outlines the facts and legal claims that form the basis of the lawsuit.
The individual will also receive a summons, which provides additional information such as:
- How long the individual has to answer the complaint;
- What may occur if the do not answer the complaint; and
- If, where, and when a court date has been scheduled.
The individual will then respond to the complaint and summons by filing an answer. This answer should outline all of the defenses the individual wants to raise.
If the individual simply ignores the summons and complaint, the credit card company or debt collector will request the court enter a default judgment against the individual. A default judgment will award the credit card company or debt collector everything they requested in their complaint.
After the individual files an answer, a court date will be scheduled by the court. It is essential to attend all court dates. If an individual misses a court date, the court may enter a default judgment against them. It is important to have the help of an attorney when defending a lawsuit.
How can I Defend my Credit Card Debt Lawsuit?
The most important step an individual can take in defending their credit card debt lawsuit is to hire an attorney. The best way to defend a credit card debt lawsuit will depend on the unique circumstances of the individual’s case.
There are, however, a couple of common techniques for defending this type of lawsuit. The first involves forcing the credit card company or debt collector to prove what the individual owes. Since the credit card company or debt collector is the plaintiff, or the party bringing the lawsuit, they have the burden of proof. This means the credit card company or debt collector must prove that they have the right to sue the individual, that the debt belongs to the individual, and that the individual owes the exact amount they claim the individual owes.
Another potential strategy to defend a credit card debt lawsuit is to challenge the debt collector’s standing to sue the individual. The plaintiff is required to prove that they have the standing to sue, or the right to sue the individual. For a debt collector, proving standing may sometimes be challenging.
A debt collector must prove that they have the right to collect the payment, which can be shown by the transfer for the signed credit card agreement from the credit card company to the debt collector. In some cases, the debt collector does not have the necessary chain of custody paperwork.
Should I Hire an Attorney for Help with a Credit Card Debt Lawsuit?
Yes, it is essential to have the assistance of an experienced credit lawyer for any credit card debt issues you may have. If you have received a debt collection notice or if your credit card company or a debt collection agency has filed a complaint against you, your attorney can help.
Your attorney can review your case, file your answer to the complaint, and represent you during any court proceedings. In some cases, your attorney may be able to help you settle your debt and avoid a lawsuit.