Can A Credit Card Company Sue You? Know Your Legal Rights

Falling behind on credit card payments can quickly lead to stress, and the looming threat of a lawsuit can make things even more overwhelming. Can a credit card company really take legal action against you? The short answer is yes. But don’t panic just yet. By understanding your legal rights and the steps involved, you can better prepare yourself to handle the situation and protect your financial future. Let’s break down what to do if a credit card company sues you.

When Will a Credit Card Company Sue You?

Yes, a credit card company can sue you if you fail to make payments on your credit card debt. If the company believes that they can no longer recover the money you owe through regular collection methods, they might decide to file a lawsuit. Typically, this occurs after several months of missed payments and failed collection attempts.

Credit card companies can take legal action to obtain a judgment against you. If they win the lawsuit, they may be able to garnish your wages, freeze your bank accounts, or place liens on your property. However, creditors cannot simply sue you at any time. There are laws that govern when and how they can take this step.

What Happens When You Are Sued by a Credit Card Company?

If a credit card company sues you, you will be served with a lawsuit. This typically means you’ll receive a court summons along with a complaint that outlines the reason for the lawsuit and the amount you owe. You need to respond to this lawsuit in a timely manner. Ignoring it can lead to a default judgment, which means the court will automatically rule in favor of the credit card company without considering your side of the case.

When you receive a lawsuit, you generally have 20 to 30 days to file a response. This response is called an “answer,” and it’s your opportunity to dispute the claim or present any defenses you have. For example, you may argue that the debt is inaccurate, that the statute of limitations has expired, or that the creditor did not follow proper legal procedures.

Defending Yourself in Court

Just because a credit card company files a lawsuit doesn’t mean they will automatically win. You have the right to defend yourself in court. Some common defenses include:

• Inaccurate Debt: If the amount the creditor claims you owe is incorrect, you can dispute this in your response.
• Statute of Limitations: In most states, there is a time limit for suing over unpaid debts, typically 3 to 6 years. If the statute of limitations has expired, the creditor can no longer sue you for that debt.
• Debt Not Valid: In some cases, a creditor might not have the right to collect on the debt. This can happen if the debt has been sold to a collection agency, and they don’t have proper documentation.
• Improper Service: If you were not properly served with the lawsuit, the court might dismiss the case. This means that the creditor did not follow the required procedures to notify you of the lawsuit.

Why You Need a Lawyer

If you’re facing a debt lawsuit, having a lawyer by your side can make a significant difference. Legal representation makes sure your rights are fully protected and helps you deal with complex legal procedures. While there are free or low-cost legal aid options, having an experienced debt defense lawyer can strengthen your case by spotting errors or violations that you may miss on your own.

Representing yourself in court can lead to costly mistakes, as the legal process is intricate and requires a strong understanding of the law. A lawyer specializing in debt collection defense can help you avoid a default judgment, reduce your debt, or even have the case dismissed, potentially saving you financially.

What Are the Consequences of a Judgment?

If the credit card company wins the lawsuit, they can obtain a judgment against you. This judgment gives them the legal right to pursue various methods to collect the debt, including:

• Wage Garnishment: The creditor can ask the court to order your employer to deduct a portion of your wages to pay off the debt.
• Bank Account Levy: The creditor may request to freeze your bank account to withdraw the money directly.
• Property Liens: A lien can be placed on your property, such as your home, which means the creditor may have the right to take the property if you don’t pay the debt.

Once a judgment is entered against you, these actions can continue until the debt is fully paid off. Depending on your state, you may be able to petition the court to limit the amount that can be taken from your wages or bank account.

How to Avoid a Lawsuit

The best way to avoid a lawsuit is to take action before the creditor decides to take legal action. Some options include:

• Communicate with the Creditor: If you’re struggling to make payments, reach out to the credit card company. They may be willing to work with you on a payment plan or settle the debt for a lower amount.
• Debt Settlement: Debt settlement is another option where you negotiate with the creditor to pay less than the full amount owed. This can be done directly with the creditor or through a debt settlement company.
• Bankruptcy: Filing for bankruptcy may discharge your debt or restructure your payments, offering protection from lawsuits. However, bankruptcy has long-term consequences for your credit, so it should be considered carefully. Discuss the matter with a Chapter 7 bankruptcy protection lawyer.

What to Do If You’re Already Being Sued

If you’ve already been served with a lawsuit, you need to take immediate action. First, review the documents carefully to confirm they are correct. If you believe there are errors, make sure to highlight these in your response to the court. If the creditor has violated any rules, such as illegal collection practices or reporting errors, make sure to bring these up in your defense.

Next, decide if you will represent yourself or hire an attorney. If you plan to represent yourself, gather all evidence and documentation that can support your case. This includes payment records, communication with the creditor, and any other relevant information. Finally, attend the court hearing. If you fail to attend, the creditor will likely win by default. Having an expert lawyer on your side means your chances of winning are high.

Debt Defenders: Your Trusted Legal Team for Debt Lawsuits in Texas

If you’re facing a lawsuit from a credit card company or dealing with overwhelming debt in Texas, Debt Defenders can help. Led by attorney Daniel Ciment, we specialize in defending consumers against debt collection lawsuits and offering debt resolution solutions. With over 15 years of experience, we are committed to protecting your rights and rebuilding your credit.

We offer a proven 3-step process to resolve your debts, protect your rights, and rebuild your financial future. Contact us today and let us help you find a solution.