Can Credit Card Companies Sue You?
Q: Can you be sued for credit card debt? What can I expect after I stop paying my bills?
A: Well, let me first start off by saying I am not a lawyer. Nothing that follows is legal advice.
What can you expect in the near term?
First bill is not paid
For the first bill that is not paid, a late fee will be applied which will probably be $35, depending on the balance and card issuer. Any payment that is between 1 and 30 days late is a “30 day late payment” so that is where you will be at after the due date passes. That being said, many banks don’t bother reporting 30 day late payments (so you can probably still pay and avoid a late payment being reported). The late fee and newly accrued interest will rollover to the next bill.
Second bill is not paid
Once the due date passes on the second bill, that’s a 60 day late payment. At this point, your APR will almost certainly go up to the default/penalty rate (which is usually around 30%). This rate increase after a 60 day late payment is permitted under the credit card reform laws, regardless of whether or not you’ve had your account open less than one year. That higher rate and another late fee will be reflected on the following statement.
Third bill is not paid
Now the credit card account is 90 days late. The debt will be growing even faster right now, because you have the late fees that have been added onto the balance and interest is probably now accruing at close to 30%.
Fourth bill is not paid
At 120 days late, it’s quite obvious you won’t be paying the bill and the account will likely be charged off. Even while the debt is in collections, the interest will continue piling up.
Can credit card companies sue you at this point? Yes, they can take whatever actions they wish under the Fair Debt Collection Practices Act and suing you is one of the options. But how often do credit card companies sue for not paying debt? Well, the likelihood depends on a number of factors including the amount owed and the creditor (some are more aggressive than others). However more often than not, instead of the credit card company suing you directly, they sell the debt off to a third-party collection agency.
What happens if you are sued for credit card debt?
Assuming the credit card company is still holding onto the debt, you can be sued anytime within the statue of limitations (which vary state by state). That means it may be possible for them to sue now or years from now, up to whenever the statue of limitations is.
If a lawsuit is filed and you get sued, then the judgment is typically for the full amount of the debt, plus interest and fees, as well as court costs and attorney fees. How that judgment can be enforced will depend on the state you live. In some states it might be possible for a creditor to request seizure of bank account balances or to place a lien on your house (but don’t worry, it’s highly unlikely that a credit card company can take your house). To the best of my knowledge, I believe all states allow wage garnishment by creditors except for Texas, Pennsylvania, North Carolina, and South Carolina (these are states where it still might be possible under certain conditions – i.e. if it’s the only way to fulfill a judgment).
Ultimately, this is something you need to consult an attorney for – to both find out how you should handle it and what a creditor can and cannot do to enforce a judgment in your state. I understand that if you’re in this circumstance, you’re probably saying “I can’t afford an attorney!” Well I have good news for you – cities and counties provide free legal aid sources where qualifying individuals can go get help without paying a dime. LawHelp.org provides free legal aid referral information for all 50 states.
Conclusion?
Can a credit card company sue you for debt? Yes. I wouldn’t say it’s extremely likely but it is possible and the amount of debt, the credit card company, and the state you live in will probably all be factors in whether or not it actually happens.
I live in Az judgements against me. my ex was to pay spouse maintaintence the only money I had , now doesn’t want to pay and I can’t pay my credit cards ? They have judgements against me ! Have health problems will need to apply for disability? Don’t know what to do!
I have unsecured credit card balance of appx. 27 k Mostof it with Amer. express Optima. I do owe it but been hospitalized for three months then under nurse care since at home. I have let them know that I put my house on market and trying to sell it to pay debts. They turned it third party and they threaten litigation. I am 67 yrs. old and only income I have is social security. Will probably not be able to work again. What can I do? I live in Missouri. The home and a 5 yr. old cheap car is my only assets.
Hello, had credit card that charged off in PA. Can anyone tell me what if anything can happen. Own home but because of market no equity and still paying mortgage. If they get a lien what does that mean?
Pressler and Pressler froze my checking account on behalf of palisade collections, but they will not give me any information on the debt debt I owe. I tried making a police report and I cannot get 1. I’m in New York City and I need help.
They must have gotten a judgement against you somewhere. Check the county court where you live and then read up online! They seem to be a fraud. Pressler & Pressler (collection attorneys) own Palisades Collections. I defeated them in NJ because they could not prove that the debt was mine. You may be able to get the default judgement lifted if you were never served with the complaint. I hear that they purposely send it to an old address so you don’t receive it and they get a judgement in their favor when you don’t appear in court. http://www.presslerclub.com/
I have a couple of questions…if the original credit card company hires a law firm and let’s say, that the law firm says it is “a debt collector”, but the original credit card company is the plaintiff in a suit against you, does the law firm have to follow the rules and regulations of the FDCPA? Under the FDCPA, it says all “debt collectors” and this law firm is openly admitting that they are a debt collector (because it written all over their paperwork), doesn’t that mean they must follow those rules? And is there any way to find out if your debt has been sold? Will the original the credit card company tell you if they still own your debt or if they sold it?
Thank You!
Yes they have to follow the same rules. You should write a letter to the collection agency asking for the following: a copy of the original credit card contract (containing the terms and conditions of repayment) which you signed at the cash register (note: this is NOT a copy of the credit card application.) b) a copy of the contract wherein the collection agency purchased the account from your credit card company and c) a copy of the creditors last billing statement. If they cannot produce these three things, they do not own your debt nor do they have the right to collect it.
I live in CA & I got a summons from Discover card, I owe them $17,823.20. There is no court date, just the summons saying I need to reply within 30 days. This is a bill I ended up with following a divorce. (Hubby ran up all the cards before he left).I cannot afford to pay it, I am now on disability & my spousal support will end in August. I am renting, I short sold the house when he left. I would pay this bill if I could, but I just can’t, I’m living payment to payment. The papers say the forms alone to file are $370! They do say if you can’t afford that there are some forms to fill out where you can ask the court to waive the fee. Should I even do that? I do owe them the money just can’t afford to pay. Can they take my car? It’s my only means of transportation. What should I do? Tks!
Discover is known to be ruthless in going after debtors. They are the only card that does not sell it’s bad accounts and always keeps in house. You need an attorney. I suggest you contact your local legal aid society to see if they can help you.
I can give my personal acct. which i think is interesting, and can be tried by anyone.
i was sued by a collection agency for approx. $11 K.
first i got the summons, the server said it was just to set a court date, nothing important…i went anyway.
all those that didn’t go, had judgements placed against them for the alleged amount.
there were about 15 people in the courtroom. as they were called, they went up and told a hard luck story. the judge listened, then found them owing (which they acknowledged. and basically told them to arrange terms with the collection agency.
i said i DID NOT OWE the debt.
i was sent to mediation…in a backroom with a group of mediators and the lawyer for the plaintiff.
we couldn’t meet a deal, so back out i went to the courtroom.
the judge told me that if it’s found that i owe 1 dollar, I’ll be responsible for the plaintiff’s lawyer fees, and i might win the battle and lose the war. then he asked the lawyer how many pieces of evidence he will bring (to the next hearing). he said 4, i was asked the same thing, i said 5
about a month later, court date. i appeared and signed in. at the appointed time, myself and the lawyer were led to a small room, the judge was there waiting for us.
after the pleasantries, the lawyer produced the assignment papers his client had regarding the bank assigning the note/debt to them.
i didn’t had anything to produce, but i had this to say.
“i do not contest the right of the creditor to sell and or assign the debt note to the plaintiff, nor do i contest their right to buy it at a discount and attempt to collect it.
However, Before i was offered credit, The lender ran my credit report and assessed the RISK i was.When i was late, They revised the risk, and upped my interest rate.
Now, you know all businesses are there to make money, But they also have top Take a RISK. If they are successful, they get to make money, If they are not, they take the loss. and they hope to win more than they lose.
I feel I PAID IN FULL for the money i got in those Interest Rates that were RISK RELATED.
The Plaintiff no doubt too a RISK buying up bad credit noted for pennies on the dollar, Well THEY have to FACE THE RISKS, Now when they don’t or can’t collect, They come running to the judge, You Sir, For you to enforce that they have a RISK FREE GUARANTEED Make Tons Of Money-NO RISK, .
The Bank Took their loss , Charged it off, Took a Tax Credit, Sold the paper, Got a few more bux and kissed it goodbye, If i pay this company, in full, The bank won’t give back the taxpayer the savings they got and give back this company their funds…
They should know You win some, you lose some, That’s in any business, And this is one they lose, Because i lost my job and ability to repay.”
The judge then said “I’ll review the case, and you can expect my final judgement on this matter within 10 days.
about 8 days later, i got the disposition.
In a nutshell. the main sentence was “The Plaintiff gets nothing, and the defendant goes without day ” meaning WALKS .
That’s My Personal Experience, I live in Central Florida.
In another case, i settled a $5,000.00 CC debt for $1250.00. I got a tax form for $3750.00 GIFT Income from the bank and had to pay tax on it like Income Tax,
Be careful when settling.
Good luck.
hi, I owe 10,000 on my 4 credit cards and I am 4 month behind on all my CC. two weeks ago I joined care one ( a settlement company ), they collect 30% success fee, so far only bank of america has agreed to the settlement of 50%, commerce bank have refused and the two other cc companies have not responded. Was it a good idea joining a settlement company and if so, what is the likelihood of being sued ? is it possible that they can still sue me even know I am currently enrolled with Care one and trying to offer something at least better than nothing ?? the money now is going into an escrow account. I have an 19000$ student loan and I am trying not to go default on it which is one of the reasons why I got behind on my bills. hp you can help me with any comments, thanx!
Help!! So hopefully someone can answer this that has experience with this. I live in Iowa and have been served an “Original notice and Petition for a Money Judgement” by Capital One. It says
1) You are notified that plaintiff demands from you $2,600 plus interest rate….A verification/affidavit of account from the Plaintiff is attached as Exhibit 1.
2) Judgement may be entered against you unless file an Appearance and Answer within 20 days of the original notice upon you.
3.) You must electronically file an Appearance and Answer using the Iowa Judicial Branch Electronic System (EDMS) at http://www.iowacourts.state.ia.us/EFile unless you obtain from the court an exemption from electronic filing requirements.
4.) If your appearance and Answer is filed within 20 days and you deny the claim, you will receive electronic notification through EDMS of the place and time of the hearing on this matter.
5.) If your Appearance and Answer is filed within 20 days and you deny the claim, you will receive electronic notification through EDMS of the place and time of the hearing on this matter.
Signed by the Law office
WHAT DO I DO! Someone knocked on my door and gave me this, I cannot afford to pay the whole amount in full as I am a student, but I can probably make small payments, is there a way to do that without going to court? Or do I have to go to court now regardless?
Any help would be really appreciated.
I was once in a whole heap of debt with credit cards. And yes I made that debt, but because I called them before a late payment, because I forsaw I was overextended and I tried to get them to just let me close the account, stop the late and interest and just pay what I owe at this time. They won’t!! I paid them more than $15,000 dollars, lost my home before I realized, I can’t pay them off. I never will. The interest and fees are too much. I wished I had kept my money and my house. I was a fool trying to pay them.
SO my advice is if you have a home and a decent running car. If you live in a state which will not allow them to garnish your wages. Don’t worry about the lien on the house cause until you sell or die, they can’t get or do anything to you anyway. I say default, change your number, go to court if ordered, answer the phone if they call and make up a statement that you say, such as. “I am on a fixed income. Times are very hard for me at this time, I heard your concerns and you have a good day.” Then hang up the phone.
One day, should you want to restore your credit and you are able to negotiate with them, then do so. Stop worrying and fretting. Credit card companies can only do what the law allows. They will harass you and try to scare you, but that is a tactic, ignore it and move on with your life. Learn from your mistake. Keep one card in good standing and let the rest go. Close bank accounts temporarily or open one in a family member, whom you are the only one with access. Say an out of state account, where the statements are online only. Times are hard, and we all are poor and sometimes you overextend yourself, but hope to get out now and then when you can pay them off, you and your credit can stand later. Until then, keep your money. Keep one card in good standing. Answer the phone, until you change your number, and learn your state laws. Open an account in a family members name and don’t make the same mistake ever again.
That is the stupidest advice ever! How about stop spending beyound your means? If you are behind..stop spending!! Lying (aka: opening an account in a family members name) is just that…a lie. You are telling people to be fools and try to hide form the system. It is fools like you that are causing a lot of issues in this country. Why am I even trying to comment to your post. Your an idiot.
I have a question. I am separated and going through a divorce. I have over $15,000 in credit card debt. I live in South Carolina and am working a steady job. Because of family obligations of $1600 to my wife and 2 automobile payments I am overextended. What would happen if I stopped paying my 2 credit cards Discover and US Bank which is the same company that holds the mortgage on our house. I need some time to pay off one of the cars and free up $500 to then come back and knock down the credit cards. I know they will screw up my credit, but will my wages be garnished? #2 If not, then once I pay them off, how long afterward will it take to restore my credit if I default on them for about 6 months. #3 Can US Bank attach a lien on the house? The mortgage is alone and my name. My wife has sole use and possession and the deed is in both of our names. Please try to give me all the help you can. Thanks for anyone’s help
Hi I stopped paying a $5k discover card bill a year ago. Today I got a court summons order. So I cant answer your questions other than, discover card does sue. As far as your other questions Im trying to find the same info what will happen now.
I live in Florida and received a letter saying they were suing my for a credit card back in 06 the latest its been so long I don’t even remember what will be the out come of it I’m not working right now and can’t pay it I’ve tried settling with them and a debt relief but they refused that was in 09 I think. What should I do ?????
File bankruptcy if it bothers you. If not..then pay your debt.
Collections is the fastest growing industry in the United States. From what I’ve seen in the last two years, they will sue for any and all amounts. It used to be in the early 2000s that people would say “They won’t sue unless you owe at least $3000 on the card.” That was true then. Today they sue for any amount. I’ve seen people sued by collection agencies for owing $500 on a credit card.
can a credit card company stop any bank from giving you loan?
no.
If being sued by a credit card company and a citation is left on your front door to appear, since this is a cival suit do I have to appear? I live in Texas. Does anyone know the answer to this question. I understand that they can only put a judgement on me since this is Texas. My house is homesteaded and I do not work now as I lost my job in April. I tried to work with Capital One but at that time I did not have a job and could not continue to make the payment. Capital One would not work with me at all.
You don’t have to appear and don’t bother. You have no defense. Unless you don’t owe the money or the debt has passed the statute of limitations. I don’t know what that is for Texas. Where I live in Idaho its 4 years. Capital One always sues. After 20 days they will get the judgement. Close any bank accounts you have. If you don’t, they will levy the account or in short, drain it of all the money. If the suite is in your name only, put all your money in your wife’s bank account. If you’re not married, try using an online back account. These will be hard fro them to trace or levy. My brother told me that you can open a Swiss Bank account online.
You MUST appear or creditor will get a default judgement. As long as you appear, it is unlikely that the creditor will have sufficent documentation to prove that the debt belongs to you. Therefore, THEY will lose. They are betting that the majority of folks will follow Richard’s bad advice and just ignore it—and will then receive a default judgement just because you didn’t show up. As long as you appear, the judge will likely conclude that there is a) insufficient proof that the debt is valid. Or b)you do not have enough in liquid, garnishable assets (i believe 60K for a single person in Texas)to award a judgement. YOU MUST FIGHT!
Do go to court. You will be surprised at the outcome. If you fail to go you are doing the same as admitting guilt and then it can get ugly. Go and watch.
I have $500 debt from cap one they say they are a law firm and suing me, but on the phone they acknowledge that they are a debt collector collecting a debt. Official looking papers but I’m suspicious it’s an agency acting like a law firm getting a judgement against me.
Credit card I got from Express is threatening to sue me for owing 500 on it. I don’t have the money to pay it, what should I do?
Ignore them. They WILL NOT sue you for $500. They are liars.
You have money to get online?? Start paying a little at a time. It is your debt. pay it
I have a considerably small amount of credit card debt I am unable to pay because I am making payments for an unexpected medical bill and simply do not have enough left over to make any type of payment after living expenses. The amount I owe is less than $1500. I received a certified letter from the Credit Card Co. I did not sign for it but the lady at the P.O. signed for it “refused” before I even had a chance to just tell her to keep it and give me back my notice. So much for that. Not that it will make a difference to the Credit Card Co. My question is this. Why do you think I received that letter? GE Money would sue for less than $1500.00? I think they were just notifying me that my account was in default in hopes of receiving some type of payment/s. That is my Guess. I think I will open a safe deposit box and deposit my paycheck $ there until I need the money to pay bills just for safekeeping. What do you think?
They will not sue you unless you owe like 10k.
Hey i have a question I live in SC and within the last year my husband has lost his job and so have i we were unemployed (with no income at all) for 6 months and fell behind on our credit card payments.
I have a Gold Option Line of Credit with Bank of America and they have sent me to a law office saying i owe $6200.00 ( i originally borrowed 9300 back Nov 07, and paid 231 a month from Jan 08 until April 11, and then additional 397.00 after that) meaning with my calculations, i have paid them back $9637.00 and they say I still owe 6200 (I’m assuming in late charges and interest). But does anyone know if they can sue me?
I never signed to start the contract. The original contract was verbal and the original amount of interest was 8.9% but according to my last statement I was mailed Feb of this year it’s now 21.9%. Can I be sued for this bill? I don’t have any $ in my savings due to we both only work part-time and we don’t have 401k or any retirement or extra income like alimony or child care
You are likely past the statute of limitations. This is BS. Do not respond to them. Send a cease and desist letter and dispute it off your credit bureau accounts with TransUnion, Equifax and Experian.
I have been sued by a collection agency representing Citibank. A judgement has been placed on me and a lien has been placed on my home. Also the collection agency seized my bank account. At this time am I able to offer a settlement for less than half of what I owe?
I need advice. I live in KY and I am being sued for a credit card debt that started off as 400 but now with court fee’s is 1200. I have no job (due to my child’s health problems), I dont own a house (just a car) and the only income is my husbands (I had the card before we got married so his name is not on it). We can do monthly payments now but how do I go into court to defend myself? Apparently the papers were served at my grandmothers house (she has dementia) and I found them and my court date is in two days! What can I do in such a short amount of time?
I’m so sorry to here! Please post your question on the forum and see what advice others can offer. Good luck.
My wife & I have 4 credit cards totaling 14,000 $ I have been unemployed since 5-2011 & I have exhausted all my benefits My unemployment benefits
have not found work my wife is still collecting un employment but still not enough to help pay our cards we owe on due date is coming up & we don’t know what to do this is gonna affect our score any suggestions?
They are lieing to you. Send them a cease and desist letter and they will not contact you anymore. Pay them back when you are able. They are not suing you.
Hello,
I have a judgement that will expire on May 14th from a credit card in 2002. It is now in the hands of a third party debt collector and this company has several lawsuits against them for unlawful practice. I want to pay this now that our finances have improved, but i am afraid to pay on this account since it is so old. I am desperate for help. What do i do?
Thanks!
RR
Yes, paying on it will hurt your credit if you pay on it, but not much. Do not pay debt collectors, demand they send the account to the original owner, this has likely been sold. It is 10 years old, it will have dropped off your credit by now, if not dispute it. They can do nothing. Send the guys a cease and desist order to never contact you again.
i have a bunch of credit cards all totaling 11,000 in debt. i want to stop paying on half of it. i just bought a house and car so i know my credit will be destroyed so i wont need it to get the two big things someone needs which is a house or a car because i just got them a year ago. so my question is if i stopped paying on $5000 of my debt will my other credit cards be closed automatically? what should i do?
If I were you, I would not default on your credit cards. I understand how frustrating CC debt can be, but ultimately people like you and me did choose to spend the money in the first place, so we have an obligation to pay it back. What is the APRs you are paying? I would try and get those as low as possible so it’s not so burdensome on you. Another strategy could be taking out a personal loan if you can get one at a lower rate than your cards.
I have called all my cc companies and they say there is nothing they can do..4 of my card have a 0% apr until June 2013 those have a total of 4900. But the two cards that are killing me have high minimum payments each month. One is a GE capital with a 1700 balance and min payment is $86 a month and my chase card with a 1900 balance and min payment of 80 a month I just wanna drop those two cards bc with high minimum payments they are killing me. If I can just make it to tax refund time I plan on paying both those cards off..but then ill have the other 6,000 overt head. It is stressing me out..I’m never gonna use cc’s again but I guess with this economy 90% of people get by with credit cards.
No your other cards will remain in good standing. I advise this since you have a high total ballance…Stop paying all of them. Wait 6 months for them to go into chargeoff, then negotiate a payment for pennies on the dollar. Right now you are only paying interest and you will not get ahead for 25 years! Just pay on the one that has the smallest ballance, then go to the next one and the next, but only if the card is in chargeoff status. You can have this paid off in 2 years w/o any additional cash flow. Good luck.
In Texas they cannot seize your home if it is homesteaded. They cannot garnish your wages…period… for payment of debt other than IRS or child support. Even if they get a judgement they cannot take your car, you retirement, 401k, various personal property (30,000 if single, 60,000 if married) and various other things (speak with an attorney).
As an attorney friend told me once, Texas was a state founded by debtors for debtors.
This goes without saying that this would be for an unsecured debt ( ie.. credit cards, etc.) but if you have a loan that is secured by property or whatever then it is an entirely different story.
I just got a call saying that I am being sued by a third party companay called Equity Financial LLC for a debt that I owed Washington Mutual. I remember the debt and admit I owe some of the amount but not all.
I live in Texas and have been unemployed or under-employed for nearly 4 years now. I have sold my truck, got rid of my entertainment and barely making my mortgage thanks to my wife’s good job. And no she is not on the card. I have never heard of a credit card company taking some one to court unless it was over $10,000. My original amount was less than $1500 and it has been 3 years plus since I stopped paying. What can I expect when I go to court and what can they do. I know without a doubt the collection company only paid pennies on the dollar.
Fred
James is correct about everything he mentioned.
It’s interesting you mention Capital One, as they are notorious for holding onto bad debts for many years rather than selling them off. However in your case, it sounds like it is in the hands of a 3rd party collector and although additional information would be needed, it sounds like an empty threat. This forum thread should help you out, take a look…
Old Capital One credit card judgement…
Hey CreditCardGuru,
I have a debt from 2002 with Capital One and I was living in Texas at the time, I believe my last payment was made towards the end of 2002 beginning of 2003, that statute of limitations in that state is 4 years, I moved to Illinois, back to Texas and now currently reside in Maryland, would the statute of limitations go by the state the debt originated in, or the state I currently live in? I ask because I keep getting third party collection calls about this debt still and they’re telling me it’s in pre legal action and it’s 2011, which I know is well past the statute of limitations for all 3 states!
In Texas, if a debt is more than 4 years old it is beyond the statute of limitations however, if you acknowledge the debt is yours or make a payment on the debt the clock starts over again. So, if it has been 4 years and you have not acknowledged the debt or made a payment… I would send them a certified letter letter telling them to stop calling you as you do not acknowledge this debt to be your responsibility. By Law they have to stop contacting you, by phone, if you send them a letter demanding that they no longer contact you.
Hi Scott,
Sure go ahead, all I ask is if along with it you can include a link back to the original source, this page.
Best,
CreditCardGuru
Can I use this information you have provided in a Q & A marketing piece I am working on? I will not change the context.
Thanks,
Scott