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Can a Credit Card Company Sue Me?

Hannah Locklear | April 11, 2024

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Fact-checked by George Simons, JD/MBA

George Simons
Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD/MBA. In his spare time, George likes to cook, because he likes to eat.

Summary: Yes, a credit card company can sue you if you owe them money and you haven’t made any payments on your account for several months, but the lawsuit must be filed within the statute of limitations. The best defense to a credit card lawsuit is to file a written Answer and negotiate debt settlement.

As of 2024, US credit card debt has reached a new height at $1.13 trillion. If you're part of this statistic and struggling to pay your credit card debt, you might be wondering if the credit company can sue you for failed payments.

The answer is yes. A credit card company can file a civil lawsuit to recover the debt if you stop making payments.

What happens if you miss your credit card payments?

If you miss your monthly credit card payments, the credit card company will probably mail you a notice of the missing payments. Then, after some time, usually 30 days, you may start receiving phone calls from the credit card company's representatives requesting you to pay what you owe. If you miss the next payment, the credit company may escalate its efforts to recover the debt.

For instance, they may hire a debt collection agency to help recover the debt. Your credit report will be negatively affected when this happens, and your credit score will drop significantly. In addition, if time passes by and you show no effort to repay the debt, the credit company might resort to extreme measures such as filing a lawsuit against you.

Use SoloSuit to file an answer to a debt collection lawsuit.

Some people believe that credit companies won't bother spending their time or money to sue them, but this isn't true even though it might be expensive to file a lawsuit, credit card companies bank on the assumption that most people won't show up in court if summoned for credit card debt.

For this reason, the creditor can decide to sue you if they believe they can recover the legal fees if the court rules in their favor.

What happens when a credit card company sues you?

If a credit card company sues you, here’s what happens:

  • You will receive court documents in the mail, notifying you of the case. These documents are called the Summons and Complaint (also known as a Petition in some states).
  • You have to respond to the lawsuit with a written Answer before the court’s deadline.
  • If you fail to respond, you will lose the case by default, which could lead to wage garnishment and other consequences.
  • Filing an Answer will be your first line of defense. The court may schedule a hearing where you can meet with the credit card company’s lawyers to negotiate a settlement.
  • Debt settlement could be a good option to resolve the debt, especially if you owe everything they claim you do.

Let’s take a closer look at what happens when a credit card company sues you.

If a credit card company sues you, you'll need to file a response to the court before your state’s deadline. The deadline could be anywhere between 14-35 days, depending on your state. If you fail to file an Answer to the court, the plaintiff can request the judge to enter a default judgment against you. They can also request you cover the interest on debt, attorney, and court fees.

Check your state's deadline to respond to a credit card lawsuit below:

Deadline Calculator

Select your state.

Select the day you were served.

Your deadline

This calculator is for educational purposes only. It does not factor in weekends or holidays, so your actual deadline may be some days later.

Back to the unanswered summons, the court may serve you with a request for a default judgment and give you a second chance to answer the complaint. However, if you ignore the court summons, the judge will go ahead and rule in favor of the plaintiff. This ruling gives the credit card company legal authority to take additional action against you to try and collect its debt in full.

Protect yourself from shady debt collectors. Respond with SoloSuit.

What happens if the judge rules in favor of the credit card company?

After the credit card company wins the lawsuit filed against you, they can request the court's permission to garnish your wages. They may also petition the court for a judgment lien. A lien will be placed on your assets, e.g., your home or car. So when you sell any of your assets, the creditor will take a share of the proceeds.

In most cases, you can't be jailed for not paying a debt unless you fail to appear in court and the judge issues a warrant of arrest against you for contempt of court.

For this reason, it's always advisable to take a collection lawsuit seriously and respond to it in time.

How to respond to a collection lawsuit

Most credit card companies often sell their debts or delegate the duty of following up on credit card debts to independent debt collectors. For this reason, a debt collector might contact you to pay the debt on behalf of the credit company. If you fail to make any payments, the debt collection agency can file a lawsuit against you in court.

It's always advisable to respond to a lawsuit as soon as you're served; SoloSuit can help you file an answer document if you don't know where to start.

But before doing this, there are a few things you should do. These include:

Verify that the debt is yours

Sometimes debt collectors make mistakes and sue people for debt they don't even owe. These mistakes are rare, but they do happen. In some cases, the debt may be inflated and not what you originally owe the credit card company.

To avoid being a victim of such mistakes, request documentation from the debt collectors verifying that the debt has been assigned to them.

You'll need to make the request in writing and then send it by mail to the debt collection agency. The debt collector will then respond by sending a copy of the credit card agreement between you and the credit company.

They will also attach proof that the debt has been assigned to them. After verifying that the debt is indeed yours, evaluate the other options as discussed below.

Make the right affirmative defense with SoloSuit.

Request a settlement

This is the best option if you want to avoid going to trial and paying legal fees. You can contact the credit company and discuss a payment plan with them. Often, creditors may accept a lump sum payment in exchange for forgiving the remaining debt amount or an installment plan.

If you don't know how to pursue a settlement agreement on your own, you can hire a lawyer to represent you in the negotiations. However, there's no guarantee that the credit company will accept a deal with you. If you agree on a payment plan, ensure you put the agreement in writing to prevent any other issues from arising in the future.

Settle your credit card debt.

Pay the Debt in Full

Settling the debt in full is the best option to consider if you can afford to pay the full amount. It resolves the debt account immediately and helps avoid a lawsuit. However, the collection account will remain on your credit report for at least seven years, and there won't be much difference in your credit rating even if you settle the debt in full.

File for Bankruptcy

This is the last resort to consider if you can't pay the debt and face the risk of wage garnishment. You'll need to consult a bankruptcy attorney to help you with the process of filing for bankruptcy before the court enters a judgment against you.

There's nothing more stressful than struggling to pay your credit card debt and facing a collection lawsuit at the same time. Worse still, the court can rule against you and give the creditor power to take measures such as wage garnishment or judgment lien.

For this reason, it's always advisable to respond to a collection lawsuit within the stipulated time. SoloSuit is a great place to start if you're looking for a fast, attorney-approved response to your debt collection lawsuit.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

Can credit card companies take you to court?

Yes, credit card companies can take you to court for failure to pay. If you’ve been sued for credit card debt, it’s because you’ve gone several months without making payments.

Note that credit card companies have to file a debt lawsuit within the statute of limitations in your state. The statute of limitations is a deadline set by state laws that prevents people from being sued for old credit card debt. The statute of limitations on credit card debt is usually around 6 years, but it depends on which state you live in.

If your credit card company files a lawsuit against you after the statute of limitations has passed, you can use this information as an affirmative defense in your case to win.

Check your state’s statute of limitations on credit card debt using the calculator below:

Statute of Limitations Calculator

Select your state.

Choose the debt type.

Select the last day you made a payment.

The Satute of Limitations

This calculator is for educational purposes only.

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