When considering a service like debt settlement programs, there can be a fear of getting sued by your creditors. The truth is—in certain states, financial creditors are allowed to sue you over credit card debt.
Now, that doesn’t always happen and every person’s financial situation can vary based on the creditors. However, if you do owe any significant amount of debt you still have a chance that your creditors could sue you.
Were you sued for credit card debt? You still have options. Here’s how to settle credit card debt when a lawsuit has been filed, even if you can’t pay!
Credit Card Debt in the US
One of the leading problems facing the US financial culture is the relationship Americans have with credit cards. When credit card debt is mismanaged, a common challenge is dealing with lawsuits as a result.
Some of the factors for this happening are the structure of credit card debt. For example, once credit limits are breached, over-the-limit fees can quickly drive balances higher.
Another example is the way interest is charged. When balances are carried from one month to the next, interest is charged on whatever the balance is at the end of the billing cycle. This means interest winds up being charged on the interest from the prior month, making it extra hard to dig out of debt.
All About Your Credit Card Lawsuit Settlement
Let’s face it—when it comes to debt, there can be consequences involved when you can’t afford to make your monthly payment. As a matter of fact, your creditor can actually file a credit card lawsuit anytime you default on your debt.
The good news is, that you may have rights and you may be able to receive legal representation depending on which debt settlement company you are with, which could be a game-changer for you.
Concerned about going to court for credit card debt? We have your back.
What to Do When You’re Summoned for Credit Card Debt?
Getting summoned by the court because of credit card debt that’s gone out of control is an overwhelming and nerve-wracking situation. Fortunately, there are steps you can take to get ahead of this frustrating legal predicament with the help of legal professionals and experts.
When you’re wondering how to respond when a subpoena from the county court reaches your doorstep, follow these tried and true tips.
First things first, if you are receiving creditor calls it is important to send them your debt settlement company’s contact number to have them handle those calls so you don’t have to. When a creditor calls your debt settlement company, they can pay close attention to your creditor’s complaint.
And depending on how much you have saved up in your dedicated monthly savings account, they may be able to negotiate a settlement for you.
Another word of advice is to be sure that the credit card company’s lawsuit is 100 percent accurate. That’s because your credit account can sometimes be sold to a special debt collection agency. Either way, you want to make sure they aren’t overstating the amount that you owe them.
If you do receive a lawsuit for your outstanding debts, you could hire an attorney for legal help or have your debt settlement company handle your lawsuit if they offer that option to you. Although no one wants to take on a big bank in court, you do have certain rights to your assets too.
Verify the Debt as Much as Possible
One crucial step for coming out ahead in the court system is verifying your debt. It’s frighteningly common for people to be sued for credit card debt even when it’s not legally their responsibility.
Thankfully, The Fair Debt Collection Practices Act provides protection in these scenarios. You can begin getting help by writing a validation letter to alleviate your debts. The Act requires debt collectors to follow precise debt validation procedures before they can take any further action against you, including legal action.
Every citizen has the right to know the details of their debt obligations and to request additional information regarding their credit card debt. This right especially holds true when they believe it’s not their debt to repay.
Do you ever spend time reading the fine print on your credit card paperwork? You’re not alone. Unfortunately, these fine print pages contain the terms that you automatically agree to when you sign the contract.
We get it, in most cases, your first credit card was when you were around 18 years of age and most of the time you have probably told yourself that you would pay it off eventually, then whoops.
The problem is, most credit card companies or lenders leave it up to you to read their conditions in small print vs just being fully transparent with you in having someone fully explain to you what could happen if you miss your payments.
However, if you would have read the credit card’s conditions beforehand, you probably wouldn’t be in this predicament.
I also want to let you know that you are not alone in this…It’s pretty common for borrowers to fall behind on a couple of bills, especially when things happen: rent goes up, unexpected medical bills, job loss or change, etc.
Carefully Consider Debt Settlement
After you’ve gathered all of the relevant and accurate information about the alleged credit card debt, the next step is to decide what your realistic options are.
Start with doing some deep research online about other cases of how the company deals with debt claims. If it looks fairly certain that the company will pursue the debt aggressively, it could be time to talk to an experienced debt attorney.
A solid lawyer can help you strategically negotiate your case, along with giving you tips on how to beat the debt collector in court. Many law firms provide free consultations to accommodate people who are already dealing with financial strain.
How to Settle Credit Card Debt When a Lawsuit Has Been Filed
Curious about how to settle credit card debt when a lawsuit has been filed? We’ve got you covered.
Here’s what you should do:
- Be intentional with your creditors and have your debt settlement company talk with them.
- Settle with your creditor to get your debts resolved.
If you are trying to settle your debts on your own, you may not like to pick up calls from creditors—and I can assure you, that you’re not alone. However, if you really want to settle your debts and move forward you should talk with your creditors or have your debt settlement company speak with them on your behalf.
If you feel like the debt is unjustified, there’s nothing wrong with telling the creditor your side of the story. Just be sure to act deliberately and calmly to get your point across in a clear way. Trust us, getting angry at the phone representative will only make it worse.
And don’t forget to ask for verifications of debts as well. If the debt is justified, you could pen what’s called a drop-dead letter, which tells them to stop communicating with you. This letter orders debt collectors to stop getting in touch with you under the protection of the law.
If all else fails, try to settle with your creditor. This is another reason to pick up the phone when the credit card company calls. For those who are unaware, speaking to your creditor on the phone could result in them striking a deal with you.
Pro Tip: It typically takes six months before your debts are taken to collections. This could buy you enough time to save up enough to make a settlement before a lawsuit is considered.
Settling With Your Credit Card Company
Interested in settling with your credit card company? During your call with your creditors, there’s no harm in offering to pay off some of your debt. If you do speak with your creditors, you should ask the credit card company if they’ll forgive the remainder and forget about the lawsuit.
It doesn’t hurt to ask to be held blameless as well. That’s because it’s one of the only ways to avoid your credit score getting impacted. What should you do if your credit card company agrees to your settlement?
If that’s the case, then you’ll have nothing to fear because your lawsuit will officially be closed. Of course, you’ll want to have written confirmation that this was a settlement instead of a payment as well.
Next, take a close look at your debt. If you find a lot of late fees and penalties, then you might be able to talk your creditor into forgiving them. At this point, it would be wise to read your contract to see which payments can legally be added as well.
Don’t know what the difference is between debt management and debt settlement We highly recommend that you brush up on these terms before you deal with your creditor!
What Not to Do When You Have Credit Card Debt?
Getting threatening letters from credit card debt collectors can create overwhelming feelings in just about anybody. The resulting panic can even affect one’s physical and mental health, making it even harder to deal with the debt.
Sometimes life just doesn’t go as planned, and what used to seem like small and manageable amounts of debt suddenly become mountains too tall to scale.
The death of a loved one, a natural disaster combined with inadequate insurance, or a sudden job loss is all common reasons people are shocked financially by circumstances out of their control.
Here are some tips for staying out of credit card debt trouble:
- Don’t pay your secured debts late – losing a car that gets you to your job will only make matters worse, so be sure to pay your secured debts above all else.
- Don’t borrow against the equity in your home – if your debt continues to grow past your ability to repay it, failing to pay the debt on your home could result in losing it altogether.
- Don’t withdraw money from your retirement savings – taking money out today is much worse for your financial health than failing to find a way to pay off your credit card debt.
- Don’t borrow money from workplace retirement accounts – the matching provided by employers delivers a higher return on your money than paying down credit card debt.
- Don’t let collectors pressure you into making rash decisions – never forget that collectors are professionals trying to earn a living. They are not working in your best interests, so avoid their appeals however tempting.
Getting a Lawyer for Your Court Summons
So, when should you even get a lawyer for your court summons? If you have a lawsuit on your hands, it means you’ve reached the last effort of the debt collection process. On the other hand, some credit card companies can decide to give up on their efforts and forward your account to a legitimate collection agency.
Once it reaches there, your account will be viewed by debt collectors that will start contacting you as soon as they can. The craziest part is that your account can potentially be sold over and over again to different collection agencies. And if it’s never taken care of, you’ll be involved in a lawsuit before you know it.
Don’t want this to happen to you? The answer is simple—make sure that you respond to your lawsuit request. Because if you miss your day in court, the odds will automatically be stacked against you, resulting in you paying the maximum amount.
For the uninitiated, credit card debt is unsecured, which means that you don’t need to have any collateral like a car or a home to be approved for one. That means that your creditor won’t have that many options when it’s time to collect their debts.
Debt settlement is a great option to help you resolve your debts if you follow the program and choose the best company.
If you are worried about getting sued by your creditors, enrolling with a debt settlement company that offers legal help would be a good option so make sure you do your research.
If you are in debt and need help to resolve them, don’t hesitate to speak to a specialist now, contact us at 800-877-2309 at Alleviate Financial Solutions today!