What to do when you get sued for credit card debt
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Many people have trouble paying their credit card debts—but not everyone realizes that they could be sued for unpaid credit card debt. An occasional missed credit card payment might lower your credit score or raise your interest rates, but after four or five months of missed credit card payments, your credit card issuer might turn your account over to a debt collector. If you continue to ignore your debts instead of settling them, the debt collector might send you a court summons.
Can debt collectors take you to court? Absolutely. How often do debt collectors take you to court? Generally, debt collectors don’t issue a court summons unless they’ve already made other attempts to collect on the debt. Suing someone over an old debt is the last step in the debt delinquency timeline, not the first one.
Here’s the good news—you can’t go to jail for credit card debt, and if a debt collector implies that you might end up in jail, they are breaking the law.
The bad news is that receiving a court summons for credit card debt can be stressful, time-consuming and frustrating.
Let’s take a look at what you should do when you are sued for credit card debt, including how to settle credit card debt before going to court.
What is a court summons for credit card debt
A lawsuit summons notifies you when you are being sued, and in this case, for credit card debt. The nature of a debt collection lawsuit will vary depending on the state in which you reside. However, once a attorney files a complaint in state civil court, you’ll receive a summons that will include the following:
- The plaintiff who is suing you and any co-defendants (such as a joint card holder)
- The total amount of money the plaintiff wishes to collect
- The date of the hearing
- Instructions on how to file a formal response
How to respond to a court summons for credit card debt
Getting a court summons for credit card debt can be nerve-wracking, but be sure to stay calm. Knowing how to deal with debt collectors can help you manage your anxiety and might even help you beat your debt collector in court.
Here’s how to respond when you are sued for credit card debt:
Don’t ignore the summons
When you get a court summons for credit card debt, pay attention to it—and make a plan of action. In many cases, you’ll have 20 to 30 days to respond to your summons, so read it carefully to learn exactly how much time you have to develop your plan.
You might be tempted to ignore your court summons, either because you don’t think the debt collectors have the right person or because you’re trying to get out of debt without paying, but that’s never a good idea. If you ignore your summons, the court is likely to rule in the debt collector’s favor and your wages could be garnished until you pay back the amount of money that the court rules you owe.
Verify the debt
If you are sued for credit card debt, your first step is to verify that the debt is actually yours. The Fair Debt Collection Practices Act requires debt collectors to provide a validation letter listing specific details about the debt, including the current creditor and the amount of debt owed. This letter must arrive no later than five days after the initial communication on the debt.
If you do not believe the debt is yours—or if you don’t know whether or not the debt is yours—you have the right to request additional information. Write a debt verification letter asking your debt collector to confirm you owe this debt. You could request the name of the original creditor associated with the debt, for example, or ask the debt collector to confirm that the statute of limitations on the debt has not expired.
Consider debt settlement
If you have good faith that the debt is yours and that the statute of limitations has not expired, consider settling your debt instead of going to court. Going to court for credit card debt can be time-consuming and expensive, and many debt collectors are more than happy to negotiate a debt settlement plan instead.
Contact an attorney
Whether you plan to pay off the debt or fight it, you’re going to want to contact an attorney. A good lawyer can help you negotiate a fair debt settlement plan with your debt collectors or talk to you about how to beat a debt collector in court. Many attorneys offer free consultations, which can be helpful during times of financial strain.
Tips on settling credit card debt before going to court
If you are being sued over an old debt, negotiating a debt settlement is a smart move. A lot of people don’t realize that debt settlement is one of the best debt relief options out there, and working with an attorney to create a debt settlement plan is often much better than going to court over credit card debt.
Here’s how to settle credit card debt before going to court:
Look at your budget
Start by examining your budget or making one. How much money can you put toward your debt each month? Is it possible to pay off a large amount of your debt at once, either by using your emergency fund or pulling money from a vacation fund or another savings goal?
Request a payment plan
One debt settlement option is to create a payment plan that allows you to pay off your debt over time. If you can turn your debt into another monthly bill, you might be able to pay it off in full and satisfy your responsibilities to the debt collectors.
Make a lump-sum payment
Your other debt settlement option is to make a lump-sum payment on your debt. Some debt collectors will allow you to settle your debt for less than the amount owed, as long as you are able to pay off the entire settlement at once. If you have enough money saved to make a significant payment on your debt, the lump-sum plan could be your best option.
What to do if it’s not your credit card debt
There are a lot of debt collection scams out there, and there are also plenty of debt collection errors. By the time an unpaid debt turns into a court summons, it has already passed from the initial creditor to at least one debt collection agency. Sometimes your debt has been handled by multiple debt collection agencies, each one selling or passing your debt along until one of the agencies decides to take you to court.
This means that there are a lot of opportunities for mistakes. The debt could actually belong to someone with a similar name, or someone who previously lived at your address—or the debt could be the result of identity theft. The debt could be yours, but the statute of limitations on the debt could have expired.
You might be able to use your debt verification letter to prove that the debt is not yours. If that doesn’t work, you might need to contact an attorney who can help you fight the debt in court. If you win your court case, the debt collector will often be required to pay your legal fees.
The bottom line
If your credit card debt feels overwhelming and you’re having trouble making payments, you have options. A balance transfer credit card, for example, could help you consolidate your credit card debt into a single monthly payment. Bankrate’s credit card debt resources can help you learn more about debt relief options like credit card hardship programs.
Use these resources to help you manage your credit card debt instead of ignoring it; you don’t want to get to the point where you are being sued over credit card debt. Debt collectors can take you to court over an unpaid debt, but there are plenty of ways to ensure you never reach that stage of the debt delinquency timeline.