Recently on our legal forum a user asked, “I thought if I didn’t pay my credit card bill that the credit card company would eventually write off the debt. Now I have found out that they have sold the debt to a collection agency and that agency has filed a suit against me. What do I need to do?”
Credit Card debt overview
Many debtors mistakenly believe that they will never have to face the consequences of their over spending. They think that credit card companies will simply forgive their debt if they stop making payments.
While the company may decide to “write-off” the debt if they have decided that you are never going to pay, this does not mean that the debt does not exist, in fact, more likely they are simply going to sell the debt to a third-party debt collection agency.
What happens after the debt is sold to a collection agency?
If your credit card debt has been sold to a third-party debt collection agency it’s time to prepare yourself for some very aggressive debt collection tactics. For example, while Visa may not have time to have their sale’s representatives call you several times a day to request payment, a third-party debt company will.
Although the collection agency is barred from certain illegal debt collection actions, this does not mean that you will not be consistently contacted. And if you do not respond, you should expect the collection agency to eventually file a lawsuit against you and try to get an judgment for collection.
What happens if the collection agency files a lawsuit?
Now, this brings us to your question. What do you do if you have had a lawsuit filed against you for credit card debt?
- Do not ignore the lawsuit. Respond to the complaint.
First, you generally should respond to the lawsuit. Failure to respond may result in a default judgment against you, and the creditor may have the right to garnish money out of your paycheck, seize money from your bank account, or obtain a judgment lien to seize your property.
- Review your defenses to the lawsuit with a collections lawyer.
Although there may be times when you owe the debt and you do not have a defense, other times there may be valid defenses for the case against you. For this reason, you may need to review your case with a collections lawyer.
Defenses against a lawsuit can include:
- Proving you already paid the debt.
- Proving the summons was not served properly.
- Proving the statute of limitations for the debt has expired.
- Proving the collections agency violated the Fair Debt Collection Practices Act.
- Proving the collection agency did not have standing to sue you.
- Proving the agency was trying to collect fraudulent charges that you did not charge.
- Proving the collection agency was suing the wrong person.
- Proving the debt the agency is trying to collect has already been discharged in bankruptcy and you are no longer responsible for repayment.
There may be times when you are sued that you have no options or defenses. Other times, however, you will need to contact a collections lawyer and fight the lawsuit.
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