Going to court because of not paying your outstanding debts can seem very stressful.
However, there are some very important things for you to know that we hope will help you in this.
The first is, you don’t have to worry about going to jail as that law was abolished many years ago back in 1833.
If you are facing a lawsuit from a credit card company due to outstanding unpaid debts and you are ready to pay off your debts, the good news is…you can!
If you are trying to avoid a lawsuit the best thing to do is always pay them back.
If you are enrolled into a debt settlement program and you are receiving a lawsuit, you may be in luck.
Alleviate Financial Solutions offers legal representation if you are with our team.
Many companies do not do this but there are good programs that understand the consumer’s debt situation and how we can help them in the best way possible.
If you are not in our debt settlement program and are wanting to pay your debts before your court date then read on.
Keep reading to learn what you should do if you receive a court summons.
When Do Credit Card Companies Sue Over Debt?
A credit card company can sue over defaulted debt whenever it wants to.
However, each bank has its own policy.
Most won’t sue for debt until at least after six months pass or more.
If they can’t reach you or you haven’t made a payment in six months, then many will consider the debt uncollectible and reports it to the credit bureaus.
At this point, they may either sue you or sell it to a collections company.
You’re still liable for an uncollectible debt for up to three or 15 years, depending on your state.
Can I Pay Debt Before a Court Date?
Yes, you can pay off debt before a court date – and you should absolutely do so if you can.
If you have defaulted on a credit card, you should start working on debt settlement as soon as you know you can’t make payments.
And if you receive notification of a lawsuit, then it becomes particularly important.
Once you enter the courtroom, you lose any leverage you might have had.
Additionally, creditors don’t like suing over debt: it’s expensive.
If you owe $5,000 on a credit card, then they could spend easily as much on legal fees if the case goes to trial.
Remember: although you won’t go to prison for failing to pay back credit card debt, attempting to avoid a court summons is a crime.
Plus, if you don’t respond, the creditor could ask for an automatic or default judgment, which means the creditor then has the legal authority to take money from your bank account, garnish your wages, or even seize your property.
How to Handle a Settlement Before Your Court Date
Are you ready to get rid of that debt once and for all?
If you have a lawsuit notice on your hands, then you have fewer options than you might have back when you missed a payment.
However, settlements are still possible and encouraged.
Here’s what to do next.
1. Figure Out Who is Suing You
Are you being sued by your credit card company – or by a collection agency who bought your debt for cheap?
You need to know who to contact about settling before court or withdrawing the lawsuit.
Keep in mind that collection agencies are more likely to settle for less because they didn’t buy your debt at its total value.
So, working with a collection agency isn’t necessarily a terrible thing.
2. Get a Debt Lawyer to Help
As mentioned above in this article, we have you covered when it comes to legal representation.
For more details, you would want to reach out to one of our debt experts to help you understand how this works.
3. Respond to the Lawsuit
You need to respond to the lawsuit even if you hope to settle before court.
Make sure you follow your local court’s rules in responding to acknowledging the lawsuit.
You may find it easier to have your lawyer respond to the lawsuit for you.
4. Work with a Creditor for a Settlement
From here, someone needs to contact the listed plaintiff to discuss a settlement.
You have several options here.
First, you can offer a lump sum to be paid immediately.
The lump sum should be reasonable and reflect the debt you owe as well as the inconvenience of the lawsuit (for the creditor and yourself).
You can do this yourself or through a lawyer.
You may also choose to use a debt settlement company to negotiate on your behalf.
A debt settlement firm can help you achieve a settlement or consolidate your debt for more manageable minimum payments.
They also provide credit counseling, which looks good to both the creditor and the judge (if it comes to that).
If you’re standing in your kitchen looking at a creditor’s lawsuit notice, you may be at a loss as to what to do next.
You might wonder, “Can I pay my debt before my court date?”
While the best time to work out a settlement with your creditor was before they sued, you still have options.
And you can still settle without going to trial.
If you’re worried about your finances and you’re now facing a lawsuit, reach out to our dedicated debt experts.
We can help you negotiate an achievable settlement, keep you out of court, and secure a brighter financial future.