Legal Action against Credit Card Defaulter
Here`s the bottom line: Credit cards aren`t a toy that allows bulk purchases on the home shopping network. The bad news is that getting a subpoena for credit card debt can be stressful, time-consuming and frustrating. “If you stop making monthly payments and your balance is high on your credit cards, a lawsuit is not uncommon,” says Tayne. “A lawyer can help you determine if the debt in question has already been paid, if the statute of limitations has expired, if the debt collector has violated the FDCPA, if you are a victim of identity theft or if you have declared bankruptcy.” There is a sporting saying that the best defense is a good offense. When a credit card company sues you, one strategy is to challenge their right to do so. It is the applicants` responsibility to prove that you owe them money. Let them do it. Debt is often sold, so ask for documentation of a loan agreement you signed and proof that the documents are accurate and from the original creditor. This can be done without a lawyer. Offer to pay off some of the debt. Ask the company to forgive the rest and quash the lawsuit.
Also, ask to be kept blameless so that your credit score is not damaged. If the company agrees and the lawsuit is dropped, make sure you receive written notice. You don`t want the company to claim that your “settlement” was actually a “payment” and then be sued again. It`s best to call the collection agency directly to create a payment plan, but keep in mind that these phone calls are recorded and anything you say can be used in your lawsuit against you. Despite your best efforts, there may come a day when default – cessation of all payments – becomes inevitable on one or more of your credit card loans or debts. Even if you have properly prioritized your debt and exhausted all alternatives, in the worst case, you can still default. Working directly with your lender can reduce your interest rate, your total amount owing, and the terms of your credit card debt. Although your creditors urge you to repay the full amount borrowed plus interest, they would rather receive some sort of payment – even if it is less than the amount owed – than nothing at all.
When you call your issuer, you may be able to negotiate your balance and redemption options to better match what you can reasonably pay each month. If you believe in good faith that the debt belongs to you and that the statute of limitations has not yet expired, consider paying off your debt instead of going to court. Going to court for a credit card debt can be time-consuming and expensive, and many debt collectors are more than happy to negotiate a debt settlement plan instead. It`s normal to feel stressed when someone sues you for unpaid credit card debt. And while it`s important to act quickly, you also want to try to stay calm and keep your situation in perspective. If you are sued for an unpaid credit card debt, don`t ignore the lawsuit. Failure to respond to a lawsuit or fail to appear on your hearing date will result in default judgment against you. In a default judgment, the judge grants the creditor suing you everything he asks for in the trial because you have not presented a case for your defence. Debt collectors are often authorized to garnish your wages, debit your bank account, or take action against your personal property to pay the debt under a default judgment. Wait. Can a credit card company sue you? Yes, it is possible.
And pushed into extreme circumstances, he will. In no time. So even if Bank of America seems like a giant of a company and you`re just one person, you have to defend yourself against this lawsuit. What for? Because the stakes are high. If you receive a subpoena for credit card debt, be careful and create an action plan. In many cases, you have 20 to 30 days to respond to your subpoena, so read it carefully to find out exactly how much time you have to develop your plan. “Be prepared when talking to creditors, if you plan to do it alone, and know that you have the right to talk to a lawyer,” Tayne says. If a collector sues you after the expiry of the limitation period, you are not without recourse. Ask for their company name and address and send them a certified letter telling them not to contact you again. Once the collection agency has received this letter, further communications may be illegal. If you haven`t made any payments for more than the statute of limitations and you`re still being sued, you can also talk to a lawyer who specializes in fair collection practices.
When you sign up for a DMP, a credit counselling agency can negotiate with creditors on your behalf. Often, creditors are willing to waive late fees, reduce interest rates, and adjust your monthly payment amount. You may also be able to add other unsecured debts to the DMP and make a one-time, consolidated payment to the credit counselling agency each month. How to pay off a credit card debt before going to court: As mentioned earlier, it`s important to file your answer before negotiating a settlement. Sometimes creditors like Bank of America can reach a settlement with you and then pursue the lawsuit behind your back by filing a default judgment against you if you don`t respond in a timely manner. After responding to the court, try sending a debt settlement letter to begin the negotiation process. Before a credit card company sues you, you`ll likely receive calls, letters, emails, and alerts on your online banking platform to collect the debt. If you ignore these attempts, a credit card company is more likely to sue you to collect the payment. That being said, it`s not impossible for Bank of America to sell your debt to a collection agency. In fact, if BofA sells your debt to an agency, it`s probably because they don`t have the right documentation to prove their side of the story. So if a debt collection agency contacts you about an old debt to Bank of America, you should investigate before taking any action. In 2021, nearly half of U.S.
adults have credit card debt. If you`re part of this statistic and you`re struggling to pay off your credit card debt, you may be wondering if the loan company can sue you for default. In the next section, you`ll learn how easy it is to respond to a collection claim, especially if you have someone like SoloSuit in your corner. But before proceeding with the reaction, you should know that Bank of America is in legal hot water for other reasons. Recently, Bank of America was on the wrong side of a class action lawsuit for allegedly engaging in fraudulent consumer practices. In particular, Bank of America tricks consumers into thinking that they automatically pay their entire monthly bill when they select the “amount owed” option for online payments. What Bank of America has done, however, is that the “amount owed” option only applies to the minimum amount owing, not the total amount. Under the Fair Debt Collection Practices Act (FDCPA), when dealing with credit card collections, you have the right to: A credit counsellor can assess your financial situation and negotiate with your creditors to create a debt management plan for you. As part of a debt management plan, you make a fixed monthly payment to the credit counseling center, which then distributes your payment to all your creditors.
For this reason, the creditor may decide to sue you if he believes he can recover the lawyer`s fees if the court rules in his favor. While debt collectors can`t get you arrested for not paying your credit card debt, creditors can still use the legal system to make sure their money is back. The most common legal recourse is to sue for payment. Seventy million Americans struggle with debt collection status, according to a study by the Consumer Financial Protection Bureau. So if you have outstanding credit card debt yourself, it might reassure you that you`re not alone. If a credit card company sues you, you will receive a subpoena in person or by mail, depending on your state`s laws. A few facts are interesting to note. First, credit card defaults have decreased during the pandemic, with severe defaults (bills 90-180 days overdue) down 53%. In addition, the Bureau of Labor Statistics predicts a 6% decline in jobs for bill and account collectors from 2019 to 2029 — though most of those jobs will be lost, not because Americans are more responsible. Instead, they are lost due to automation.
It`s important to point out that you can`t go to jail if you don`t pay your credit card bill. In fact, if a debt collector threatens you with jail time for an unpaid debt, they`re likely violating a federal law known as the Fair Debt Collection Practices Act (FDCPA). This is the last resort you should consider if you are unable to pay the debt and are at risk of garnishment on wages. You will need to consult a bankruptcy lawyer to help you declare bankruptcy before the court makes a judgment against you. Here`s how to react when you`re sued for credit card debt: Credit card companies write off millions of bad debts every year. Costs are passed on to consumers in the form of higher interest rates and fees. Getting out of credit card debt is a difficult task, but it`s worth it.