5 Steps You Must Take When Facing a Credit Card Debt Lawsuit

credit card

Many Floridians know there are consequences to accumulating too much debt and not being able to pay it off. Of course, it will wreak havoc on your credit score, but there’s more to it than just that. Another major consequence is that you may face a lawsuit if the debt collector attempts to sue you for the debt. Unfortunately, many people aren’t aware that credit card companies can file a lawsuit to collect on their debt. When they receive notice of the lawsuit, these same people also don’t know what to do or the next steps to take. If you’ve received notice of a lawsuit for unpaid debt, below are the five steps you must follow.

1. Respond to the Debt Collector

It’s tempting to ignore calls and letters from debt collectors. However, that is a very dangerous thing to do. Avoiding debt collectors won’t make you any less liable for the debt, and it may also make the collector angry. If this happens, they are more likely to become even more aggressive in pursuing the debt. Also if you ignore these communications, you won’t be able to determine if the debt is actually yours. That means you could be missing out on a number of possible defenses.

2. Determine if the Debt is Yours

First things first, you must determine if the debt is actually yours. There are many situations in which you may find that the debt is not yours. These include:

  • You’ve paid the debt: You may have paid the debt but the credit card company or debt collector has made a mistake and not erased it from your account.
  • The statute of limitations has run out: Personal loans have a statute of limitations of five years, while revolving debt, such as credit cards, have a statute of limitations of four years. If this time has expired, the debt collector can no longer pursue the debt.
  • Fraud: If someone has stolen your identity and used your credit card to rack up significant amounts of debt, you are not liable for repaying that debt.
  • Fair Debt Collection Act violation: Under the Fair Debt Collection Act, debt collectors must abide by certain laws. When they violate them, such as not providing all the necessary information about your debt, you can file a countersuit.
  • Bankruptcy: If you have filed for bankruptcy and the debt has been discharged, the debt is no longer yours. Debt collectors are required to stop contacting you to recover the funds.

If any of these situations apply to you, it can provide a defense to the lawsuit and you should fight for your rights.

3. Attempt to Settle with the Credit Card Company

Another reason it’s a bad idea to avoid debt collectors is that when you do, there’s no chance to negotiate with them. However, when you return a debt collector’s calls or respond to their letters, you can ask them if they will accept a settlement. Sometimes, debt collectors are more willing to recover a little bit of the debt rather than take the chance of not recovering any of it. Credit card companies write off millions of dollars of debt every year, so there’s a chance they’ll be willing to write off yours, too. So, how do you negotiate with the credit card company?

Start by reviewing the debt and determining if there are inflated late fees and penalties. If there are, you’ll have an even better chance of getting those waived. Then, ask if it’s possible for them to lower the interest rate on the debt and apply it to the past debt as well. Also, ask them if they can create a payment arrangement in which you only pay back a portion of the debt a little at a time. Although the credit card company or debt collector is under no obligation to accept this arrangement, they may view it as a better option than not recovering any of the debt.

Also, make sure that before you start negotiating at all, you ask to speak to a supervisor or manager. The person who answers the phone probably doesn’t have the authority to negotiate a settlement. Before you go through your entire case, you want to make sure you’re talking to the right person.

4. Speak to an Attorney

Any time a person is facing a lawsuit they should speak to a lawyer, and that is also true if you are facing a debt collection lawsuit. Most people do not have the necessary knowledge about the judicial system that’s needed to be successful in a lawsuit. An attorney can also determine if the debt collector violated the Fair Debt Collection Practices Act or any other laws that can provide a viable defense. Also, a lawyer can help determine if the collector suing you has legal standing to file a lawsuit.

5. Respond to the Lawsuit

The first thing an attorney will do when they take on your case is to respond to the lawsuit. If you don’t respond or show up for the court hearing, the judge will automatically rule against you and hold you liable for paying the full amount of the debt. When this happens, the debt collector may then begin proceedings for garnishing your wages, seizing your bank account, or other measures to ensure they recover the full amount of debt. Responding to the lawsuit and appearing in court gives you the chance to defend yourself and possibly have a judgment issued in your favor.

Did a Creditor File a Lawsuit Against You? Call Our Florida Debt Defense Lawyers

If a debt collector has filed a lawsuit against you, it’s important you don’t try to take on the creditor alone. At Loan Lawyers, our Fort Lauderdale debt defense lawyers can negotiate with the debt collector on your behalf and when necessary, provide the solid defense you need. We will always ensure your rights are upheld and give you the best chance of a successful outcome. If a creditor has taken action, call us today at (954) 523-HELP (4357) to schedule a free consultation with one of our attorneys.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money-back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.