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What to Do if You’re Getting Sued by a Credit Card Company

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We have a negative collective image of what it is like to be sued by a credit card company. Too many people live in fear of what is a standard legal procedure, although it’s tough dealing with collectors making inflated claims or issuing illegal threats in their effort to collect. Here are a few tips on what to do when you’re being sued by a credit card company, bank, debt collector or lawyer.

Don’t Panic

The first thing to do is not panic. A credit card company can sue you, but it isn’t the end of the world. They will, at most, garnish your wages. They cannot take your car to pay your credit card bills. They cannot evict you from your home or send you to jail, though some shady credit card collectors may resort to such threats to try to get you to pay them. Never give the bank debt collector (or someone posing as one) access to your checking account; they may clear out the account for the amount they say you owe, leaving you unable to pay your rent. For specific information on how to handle a specific company you’re being sued by, you can refer to the following page from Texas Debt Defense; Being Sued By: Credit Card Company, Bank, Debt Collector Or Lawyer.

Verify the Information

Remember that debt collectors will often make empty threats they cannot deliver upon. Don’t assume that the person threatening to sue you to collect can do anything, and never, ever send money to a debt collector because they threaten you over the phone. Demand that they send you a letter giving the amount owed, their right to collect from you, and the party which originally held the debt.

For example, it is possible that the debt collector is trying to collect from someone of the same name or pressing family members to pay the debt someone else owes. If you receive a collection letter from a credit card company, verify that you actually had an account with them for the dates they say you ran up debt. The last thing you want to do is pay for a card run up by an identity thief.

Another issue some debtors run into is that they paid off a balance, the credit card company didn’t close the account before tacking on annual fees, and now you’re being sued for interest and penalties on a debt you shouldn’t have. In some cases, the debt collector or lawyer is wrongly pursuing you for an ex-partner’s debts or debts discharged in bankruptcy. Some unscrupulous debt collectors buy up debt past the statute of limitations and try to pursue people for the uncollectable debts; if you send them a payment before verifying that you actually owe it, you restart the clock on the statute of limitations and legally validate their right to collect.

So yes, verify the information before you write a check to pay the bill. Verify what you owe, both the initial balance and fees they’re tacking on.

Contact the Lawyer for the Collections Department

Contact the lawyer for the collections department of the credit card company or the legal department for the debt collection service that bought your debt. You may be able to settle the debt for the entire balance you originally owed or even less if you can offer them a full settlement. You can certainly argue for lower fees and assessments and ask to be put on a payment plan. If you cannot afford to make payments or settle the debt, then you’ll need to talk to an attorney on your own.

Get the Essentials in Writing

You need to have several key things in writing. First, get written documentation acknowledging that the lawsuit will be dropped in return for payment. Second, the documentation must come from the creditor acknowledging your payment as payment in full. Without this second piece, a creditor could accept your payment as a payment and then sue you for the remaining balance.

Consider Working with a Lawyer

If your debt is in the thousands, it would be a better idea to start looking for a debt settlement lawyer instead of working out a deal directly with the credit card company. Debt settlement attorneys have seen thousands of cases and are used to working with credit card companies. A good attorney can get you a much better deal than you could negotiate for yourself. Credit card companies also tend to play much harder when they’re dealing with someone who isn’t represented.

Conclusion

So, if you are being sued by your credit card company, make sure you follow the steps outlined in this article to the letter. Always remember that many collection firms will accept less than the stated balance and/or reduce the fees they’re demanding. However, you may need legal counsel yourself if they won’t reduce the debt or are trying to collect an noncollectable debt.