It is important to know all of your options if you are sued by your credit card.
Clients often contact our office after being served in a lawsuit for collection of credit card debt. What should you do, if this happens to you?
Do not ignore deadlines. The deadline to file a response to the complaint will vary depending on where the law suit was filed and the manner in which you were served with process. The summons you were served with will provide information on when your response is due. Do not ignore the deadlines set forth in the summons. If you fail to file a timely response or appear for a court date, the court will enter a default against you, which could result in a default judgement against you for the entire amount requested by plaintiff in the complaint. It is extremely difficult to undo a default once default has been entered against you. Care should be taken to contact an attorney as soon as you have been served with the lawsuit to ensure that your attorney has enough time to file an appropriate response on your behalf.
Ask your attorney if the complaint was filed timely. Every state imposes a statutory deadline which limits how long a creditor can wait to file a lawsuit against you. I often see complaints filed against consumers that are untimely and should be dismissed because the creditor waited too long to file the lawsuit. Make sure you ask your attorney to review this issue before filing a response to the complaint because it can often be dealt with at the beginning of the case. In addition, before communicating with the plaintiff or its attorney, make sure you consult an attorney. In some instances, you can restart the statute of limitations unintentionally by inadvertently acknowledging the debt or agreeing to make a payment.
Settlement is usually an option. If the debt is small enough and you have no other debt issues that might make bankruptcy a better option for you, you may be able to resolve the lawsuit by entering into a settlement agreement with the plaintiff. Before entering any written agreement, however, you will want to consult an attorney to make sure you completely understand the terms of the settlement agreement and that it resolves the lawsuit with finality.
Bankruptcy may be the better option. In certain situations, if the amount of the debt is significant enough or you have other debt issues looming, bankruptcy may be your best option. Once you file a bankruptcy case, an automatic stay is imposed during the pendency of your bankruptcy case that will essentially put the credit card lawsuit on hold, so that you can deal with the debt through the bankruptcy case. Depending on the type of bankruptcy you filed, you will either be seeking a discharge of the debt, which wipes the debt out, or you will be filing a repayment plan in the bankruptcy case to repay the debt over time.
Your Attorney is key. Although you could attempt to represent yourself in the lawsuit, I recommend that you hire an attorney who has experience representing defendants in credit card collection lawsuits and bankruptcy cases. If you hire an attorney who handles only one of these areas, you risk missing out on the entire universe of your legal options. If you would like to speak to us about your case, we can help. Call us now at 407.374.1372 or click here to book a free consultation, now.