Dear Bankruptcy Adviser,
Can a credit card company really take me to court over a credit card? I have a credit card with a $1,700 limit and I’m a full-time student who can’t afford much, so would they still be able to take me to court? What would happen if I just paid back what I could when I could; almost like a monthly payment?
They can take you to court, but they might not. When creditors review your account, they look for many things when deciding whether or not to sue:
- How far have you fallen behind? Creditors do not sue you for being one month late because that would be a complete waste of money. However, if you have fallen behind more than 60 days, then very likely your account has been reviewed by the collections department.
- Is there a co-signer on the account? If so, it is not less likely you will be sued, but the creditor will begin to contact the co-signer immediately.
- How long have you been at your job? The longer you have been at your job, the less likely are you to simply quit and find new employment — and the better a candidate you are for wage garnishment.
- Have you lived in the same location for a number of years, and do you have an active phone number? If so, you’re not likely to disappear. Amazingly, some people would rather quit their jobs, change their phone numbers, relocate and live a cash-based life rather than deal with creditors or file bankruptcy. For more information on this technique, ask a neighborhood thief.
- Are you under 40 years old? Unless the creditor has been notified that you are permanently disabled, then it knows you are going to work again. The collection agency would rather sue you, get the judgment and wait for you to start working to collect the money.
So, let’s suppose the creditor (the bank to whom you owe the $1,700) makes the decision not to sue you. That’s not the end of the story. The creditor could sell the debt at a discount to a collection agency that might be willing to wait until you get out of school. At that time, the debt will have doubled, and the collection agency will be entitled to collect the full amount. The collection agency may also sue and impose a wage garnishment or bank levy, depending on the laws in your state.
Let’s avoid the worst-case scenarios and focus on what you can do now:
- If possible, roll your credit card debt into student loans, i.e., take out additional loans to cover the debt. This way you’ll have only one payment to make at a lower rate.
- If not, make the minimum payment.
- If you can’t do that, consider taking on a little extra work. Most schools have tons of available part-time work that might not only help you make your minimum payment, but give you a little spending cash on top.