What do I do if I’m Sued by a Credit Card Company?

The day of reckoning has finally arrived. If you’re like most people, you experienced a drop in your stomach when you opened the envelope announcing that a credit card company is suing you for outstanding debts. While most consumers are aware that there are consequences for not making payments, it can still feel overwhelming when the bad news shows up in your mailbox.

If you find yourself asking “What can I do if I’m sued by a credit card company,” we’re here to help. Read on to find out a few do’s and don’ts for handling this type of situation the right way.

Don’t ignore it:
The worst thing you can do is ignore legal action. Credit card companies have every legal right to sue you for any money you owe plus legal fees. Even if a credit card company begins the process of filing a lawsuit, that doesn’t mean they will go through it no matter what. If you act as soon as you receive the notice, you could save yourself a lot of money and stress. Credit card companies are not allowed to threaten a lawsuit if they don’t intend to go through with it though, so ignoring them in hopes it will just go away is a bad idea. ( Wallet Hub. )

Do find out who is suing you/request for proof by certified mail:
The first thing you need to do when you get a notice of a pending lawsuit is to determine who the law firm is representing. Typically, the plaintiff will either be the actual credit card company or a debt collection agency. With this information in hand you can request that the company send you proof of the debt you owe via certified mail. You may also ask the representing law firm to send the information as well. They are legally obligated to send you documentation if you request it.

Don’t share banking or work information:
When you talk to the credit card company or debt collection agency in charge of your debt, do not give them any information about your banking institution or tell them where you work. Giving this type of information to the company could result in garnishment of wages.

Do Consider Settlement Options:
If you reach out to the credit card company or debt collection agency within a few days of receiving a lawsuit notification, you may be able to make a settlement deal with the company. This may require that you make full restitution on an affordable payment plan, or you may be able to pay to negotiate for a partial repayment plan. Before you consider anything else, talk to the credit card company. This could save you from having to file bankruptcy.

Don’t forget to check due diligence:
If you suspect that the company filing the lawsuit could have made a mistake in the filing or notification process, you should consult an attorney. A skilled attorney will check to see if the company met due diligence which includes providing names and addresses of all parties involved in the lawsuit.

Do Consider Bankruptcy:
If all else fails and you cannot reach a settlement agreement with the credit card company, you could consider filing for bankruptcy. Bankruptcy will erase most debts including lawsuits and credit card bills. However, bankruptcy does not apply to secured debt, student loans, child support and income tax. Additionally, you cannot file for bankruptcy on credit card debt incurred as part of a divorce settlement.

We know that dealing with a credit card lawsuit can be a stressful time. We can help. We believe everyone deserves a fresh start. If you decide that you are unable to meet your monetary obligations, call Burk and Ramsey today and take the first step towards easing the strain on your finances.