How Often Credit Card Companies Sue Non Payment - FEDERAL LAWYERS [2024] (2024)

How Often Credit Card Companies Sue Non Payment

HowOften Do CreditCard CompaniesActually Suefor Non-Payment?

TheLowdown on GettingSued by CreditCard Companies

So, let’s bereal here – missingcredit card paymentscan be a totalnightmare. You‘re hit with latefees, your creditscore takes anosedive, andyou’ve got debtcollectors blowing up yourphone. But oneof the biggestworries is thepossibility ofgetting suedby your creditcard company.Just how likelyis that to happenthough? We’re hereto give you theinside scoop onwhen credit cardcompanies decideto take legalaction – andwhat you cando to avoid it.

The Statson Credit CardLawsuits

According toa report fromthe ConsumerFinancial ProtectionBureau, creditcard companiesactually sueconsumers around15% of the timefor unpaid debts. That may notsound too bad, but remember– we’re talkingabout over 1in 10 cases here.The reportalso found thatthe average debtamount involvedin these lawsuits ranged from$2,700 all theway up to $12,300. Sowe’re not exactlytalking aboutpocket changehere, folks.Now, everycredit card issuer is a littledifferent interms of whenthey’ll pursuelegal action. But in general, you can expectthe followingtimeline:

• 30 days late: Latepayment reportedto credit bureaus, damaging yourcredit score
• 60 days late: Credit cardcompany may raiseyour interestrate to the penaltyAPR (ouch!)
• 180 days (6 months) late: Credit carddebt is “charged off” and may be soldto a debt collectionagency
• 6+ monthslate: Creditor ordebt collectoris more likelyto file a lawsuitagainst you

The keytakeaway? Ifyou’re over6 months behindon payments, watchout – you couldbe getting thatdreaded summons toappear in court.

Why CreditCard CompaniesSue (And WhenThey’re MoreLikely To)

Of course, credit cardissuers don’t makethe decisionto sue lightly. Afterall, legal actioncosts them timeand money too. So what factorsgo into theirdecision to takea delinquent accountto court?A few keythings creditors consider:

• Amount ofdebt owed: Largerunpaid balances aremore likely totrigger a lawsuit, since there’s more moneyat stake forthe creditor.
• Length of delinquency: Thelonger you’ve gonewithout makingpayments, thehigher the chancesof legal action. Six months isusually the minimumbefore they’ll filesuit.
• Your responsiveness: Ifyou’ve been ghosting your creditor and ignoring theircalls/letters, theymay see a lawsuitas the only wayto get your attention.
• Your abilityto pay: Creditors will lookat your income, assets, andoverall financialsituation. Ifit seems likeyou can pay butjust aren’t, thatmakes them moreinclined to sue.

At the endof the day, creditcard companiesare businesses– they want torecover as muchof that unpaid debtas possible. Ifthey think suing you is theirbest shot atgetting paid, they just mighttake it.

WhatHappens If aCredit Card CompanySues You

Okay, soyour worst fearhas been realized– you’ve beenserved with asummons to appearin court foryour unpaid creditcard debt. It‘s definitelynot an idealsituation, butdon’t panic justyet.Here’s aquick rundown ofwhat to expectif you get suedby a credit cardcompany:

• You’ll receive writtennotice of thelawsuit, includingdetails on theamount you allegedlyowe and a courtdate.
• If youdon’t respondby the deadlinegiven (usually around20-30 days), thecreditor canrequest a defaultjudgment againstyou. Not good!
• If you dorespond, thecase will goto trial whereboth sides canpresent evidence. The creditor hasto prove youowe the debt.
• If the creditor wins, thecourt will issuea judgment statingyou have to payup. They canthen pursue methodslike garnishing yourwages or placingliens on yourproperty to collect.
• If you win(for example, if the creditor can’t validatethe debt), thenthe case is dismissedand you’re offthe hook.

The keything to know? You can’t justignore that summons – you haveto respond, evenif it’s to sayyou can’t affordto pay rightnow. Blowing itoff means anautomatic judgmentagainst you.

Defenses You CanUse If Sued forCredit Card Debt

Now for thegood news – youmay actuallyhave some soliddefenses to useif a credit cardcompany doesdecide to takeyou to court. Here are someof the most commonones:

• Statute oflimitations: There’s a time limit(usually 3-6years) for howlong a creditor cansue you overa debt. If theyfile after thatwindow, you canget the casedismissed.
• Lack of proof: The burdenis on the creditor to proveyou owe the debt. If they can’t produce adequatedocumentationlike accountstatements andthe originalcredit agreement, you can challengeit.
• Mistaken identityor fraud: Ifthe debt isn’t actually yoursdue to identitytheft or a mix-up, you can fightthe lawsuit onthose grounds.
• Unauthorized fees/charges: Creditcard companieshave to followrules about feesand interestrates. If theyovercharged youillegally, youcan use thatas a defense.
• Bankruptcy discharge: If the debtwas includedin a past bankruptcy, it should havebeen wiped out– meaning thecreditor hasno grounds tocollect on itnow.

The keyis knowing yourrights and beingprepared to backup your defensewith evidenceand documentation. An experiencedconsumer lawyercan be a hugehelp in buildingyour case.

Howto Avoid GettingSued in the FirstPlace

Of course, the ideal scenariois avoiding acredit card lawsuitaltogether. Whilesometimes unexpectedfinancial hardships make thatimpossible, thereare some smartstrategies toreduce your risk:

• Communicate withcreditors: Assoon as you realizeyou may missa payment, reachout and explainyour situation. Many will workwith you on modifiedpayment plans.
• Enroll inhardship programs: Credit cardissuers have“hardship” programsthat can providetemporary relieflike waived feesif you’ve experiencedjob loss, medicalissues, etc.
• Negotiate settlements: If you cancome up witha lump sum, evenif it’s lessthan the fullbalance, creditors may acceptit to close outthe account andavoid litigation.
• Consider creditcounseling: Nonprofitcredit counseling agencies canhelp you managepayments througha debt managementplan and actas a go-between withcreditors.

The bottomline? Being proactive and takingsteps to addressyour debt – ratherthan just lettingit pile up – iskey to keepingthose creditcard companiesat bay.

Don’t Go It Alone– Hire a Lawyer

Look, we getit – dealingwith debt andthe threat oflegal actionis incrediblystressful. Buthere’s the thing: you don’t haveto face thisbattle alone. Having an experiencedconsumer lawyerin your cornercan make a hugedifference.AtSpodek LawGroup, we‘ve helped countlessclients fightback againstcredit card lawsuits and findsolutions toget out fromunder their debtburdens. Ourteam knows allthe ins andouts of consumerprotection laws– we’ll makesure your rightsare fully protectedevery step ofthe way.Trying totake on a creditcard companyby yourself isjust asking fortrouble. Withour expertise, we can:

• Analyzeyour full financialsituation andlegal standing
• Advise youon the strongestdefenses foryour specificcase
• Representyou through allcourt proceedingsand negotiations
• Explore optionslike bankruptcyif it makes sensefor your circ*mstances
• Take the stressoff your shouldersand handle allthe legal complexities

Don’t waituntil you getthat summons inthe mail – ifyou’re behindon credit cardpayments, thetime to act isnow. Give usa call at 212-210-1851or contact usonline, and let‘s get startedon your defensestrategy.At theend of the day, credit cardcompanies aremotivated byprofits – notby ruining yourlife over debt. With the rightlegal team onyour side, youcan fight backand find a resolutionthat works foryou. We’re hereto make sureyou don’t getsteamrolled bythese massivecorporations.

Key Takeaways

To sumit all up, hereare the key pointsto remember aboutcredit card lawsuits:

• Creditcard companiessue consumersaround 15% ofthe time forunpaid debts, usuallyover $2,700
• Lawsuits become muchmore likely ifyou’re over6 months behindon payments
• Creditors considerfactors likedebt amount, delinquency length, and your abilityto pay when decidingto sue
• If sued, you must respond– ignoring itleads to an automaticjudgment againstyou
• You mayhave defenses likestatute of limitations, lack of proof, or bankruptcydischarge
• Beingproactive bycommunicating withcreditors andseeking helpcan prevent lawsuits
• Havingan experiencedconsumer lawyeron your sideis invaluable forprotecting yourrights

So don‘t just bury yourhead in the sand, folks. If thosecredit card billsare piling up, it’s time totake action – beforeyou find yourselfon the receivingend of a summons. Spodek LawGroup has yourback; just giveus a call andwe’ll get towork defendingyou.

RedditUser Q&A

Let’s takea look at somecommon questionspeople have aboutthis topic overon Reddit:

“I’m about 4months behindon my creditcard payments. How much longeruntil I needto worry abouta lawsuit?”– u/OverdueCardDebt

Well u/OverdueCardDebt, you‘re cutting itpretty closethere. As wementioned, that6 month markis usually whencredit card companiesstart seriouslyconsidering legalaction.Our advice? Don’t wait forthat summons toarrive. Get onthe phone withyour creditors ASAP and explainyour situation. See if you canwork out somekind of modifiedpayment planto show you’re makingan effort. Thelast thing youwant is for themto decide you‘re just blowing themoff.

“My creditcard debt wasincluded in abankruptcy Ifiled 2 years ago. Now I’m gettingletters froma law firm sayingthey’ll sue ifI don’t pay up. Can they actuallydo that?”– u/PostBKDebtTrouble

Thanks foryour question, u/PostBKDebtTrouble. Inthis case, youmay have a verysolid defenseif this creditor does decideto take you tocourt.When adebt is discharged in bankruptcy, that means it‘s been legallywiped out – thecreditor hasno grounds totry and collecton it anymore. Their threatsto sue over adischarged debtare empty; youcan respond citingthe bankruptcydischarge orderas your defense.Of course, makesure you havedocumentationproving thisdebt was includedin your bankruptcycase. But assumingthat’s all inorder, you cantell this lawfirm to takea hike.

“I only ever hadauthorized useraccess on myex’s credit card, but now they’re suing me for$10k in unpaid balances after webroke up. Whatcan I do?”– u/AuthUserDebtTrouble

Oof,that’s a toughsituation u/AuthUserDebtTrouble, but youmay have a strongdefense here. There’s a bigdifference betweenbeing an authorizeduser and actuallybeing a co-signer/co-owneron a credit cardaccount.As an authorizeduser, you hadpermission tomake chargeson the card – butyou never agreedto be financiallyresponsible forpaying off thedebt. That obligationfalls solelyon the primaryaccount holder(your ex in thiscase).

If youcan prove youwere only anauthorized userand never co-signed or otherwiseaccepted liability, you can usethat as a defenseagainst thislawsuit. Makesure you havedocumentationshowing yourstatus on theaccount.

“I currentlyowe about $15k incredit card debtacross 3 different cards. I know I needhelp – shouldI hire a lawyeror go to a creditcounseling agencyfirst?”– u/SeriousCardDebtHelp

Great question, u/SeriousCardDebtHelp. Withthat level ofdebt, you’re definitelyin the dangerzone for potentiallawsuits downthe road if youcan’t get itunder control.Our suggestion? Why not pursueboth optionsin tandem? Startby consultingwith a reputable creditcounseling agency– they can lookat your fullfinancial pictureand go over strategiesfor managingthat $15k throughthings like debtmanagement plans.At the sametime, it’s wiseto also havean initial consultationwith a consumerlawyer. Theycan review yourrights, analyzeany violationsby the creditors, andstart preparinga defense strategyin case any ofthem do decideto take legalaction over thoseunpaid balances.Having thatlegal backupwhile also gettingyour financesorganized viacredit counseling puts you inthe best positionto tackle thisdebt head-on.