How Often Do Credit Card Companies Actually Sue for Non-Payment?
The Lowdown on Getting Sued by Credit Card Companies
So, let’s be real here – missing credit card payments can be a total nightmare. You‘re hit with late fees, your credit score takes a nosedive, and you’ve got debt collectors blowing up your phone. But one of the biggest worries is the possibility of getting sued by your credit card company.Just how likely is that to happen though? We’re here to give you the inside scoop on when credit card companies decide to take legal action – and what you can do to avoid it.
The Stats on Credit Card Lawsuits
According to a report from the Consumer Financial Protection Bureau, credit card companies actually sue consumers around 15% of the time for unpaid debts. That may not sound too bad, but remember – we’re talking about over 1 in 10 cases here.The report also found that the average debt amount involved in these lawsuits ranged from $2,700 all the way up to $12,300. So we’re not exactly talking about pocket change here, folks.Now, every credit card issuer is a little different in terms of when they’ll pursue legal action. But in general, you can expect the following timeline:
-- 30 days late: Late payment reported to credit bureaus, damaging your credit score
- 60 days late: Credit card company may raise your interest rate to the penalty APR (ouch!)
- 180 days (6 months) late: Credit card debt is “charged off” and may be sold to a debt collection agency
- 6+ months late: Creditor or debt collector is more likely to file a lawsuit against you
The key takeaway? If you’re over 6 months behind on payments, watch out – you could be getting that dreaded summons to appear in court.
Why Credit Card Companies Sue (And When They’re More Likely To)
Of course, credit card issuers don’t make the decision to sue lightly. After all, legal action costs them time and money too. So what factors go into their decision to take a delinquent account to court?A few key things creditors consider:
- Amount of debt owed: Larger unpaid balances are more likely to trigger a lawsuit, since there’s more money at stake for the creditor.
- Length of delinquency: The longer you’ve gone without making payments, the higher the chances of legal action. Six months is usually the minimum before they’ll file suit.
- Your responsiveness: If you’ve been ghosting your creditor and ignoring their calls/letters, they may see a lawsuit as the only way to get your attention.
- Your ability to pay: Creditors will look at your income, assets, and overall financial situation. If it seems like you can pay but just aren’t, that makes them more inclined to sue.
At the end of the day, credit card companies are businesses – they want to recover as much of that unpaid debt as possible. If they think suing you is their best shot at getting paid, they just might take it.
What Happens If a Credit Card Company Sues You
Okay, so your worst fear has been realized – you’ve been served with a summons to appear in court for your unpaid credit card debt. It‘s definitely not an ideal situation, but don’t panic just yet.Here’s a quick rundown of what to expect if you get sued by a credit card company:
-- You’ll receive written notice of the lawsuit, including details on the amount you allegedly owe and a court date.
- If you don’t respond by the deadline given (usually around 20-30 days), the creditor can request a default judgment against you. Not good!
- If you do respond, the case will go to trial where both sides can present evidence. The creditor has to prove you owe the debt.
- If the creditor wins, the court will issue a judgment stating you have to pay up. They can then pursue methods like garnishing your wages or placing liens on your property to collect.
- If you win (for example, if the creditor can’t validate the debt), then the case is dismissed and you’re off the hook.
The key thing to know? You can’t just ignore that summons – you have to respond, even if it’s to say you can’t afford to pay right now. Blowing it off means an automatic judgment against you.
Defenses You Can Use If Sued for Credit Card Debt
Now for the good news – you may actually have some solid defenses to use if a credit card company does decide to take you to court. Here are some of the most common ones:
- Statute of limitations: There’s a time limit (usually 3-6 years) for how long a creditor can sue you over a debt. If they file after that window, you can get the case dismissed.
- Lack of proof: The burden is on the creditor to prove you owe the debt. If they can’t produce adequate documentation like account statements and the original credit agreement, you can challenge it.
- Mistaken identity or fraud: If the debt isn’t actually yours due to identity theft or a mix-up, you can fight the lawsuit on those grounds.
- Unauthorized fees/charges: Credit card companies have to follow rules about fees and interest rates. If they overcharged you illegally, you can use that as a defense.
- Bankruptcy discharge: If the debt was included in a past bankruptcy, it should have been wiped out – meaning the creditor has no grounds to collect on it now.
The key is knowing your rights and being prepared to back up your defense with evidence and documentation. An experienced consumer lawyer can be a huge help in building your case.
How to Avoid Getting Sued in the First Place
Of course, the ideal scenario is avoiding a credit card lawsuit altogether. While sometimes unexpected financial hardships make that impossible, there are some smart strategies to reduce your risk:
- Communicate with creditors: As soon as you realize you may miss a payment, reach out and explain your situation. Many will work with you on modified payment plans.
- Enroll in hardship programs: Credit card issuers have “hardship” programs that can provide temporary relief like waived fees if you’ve experienced job loss, medical issues, etc.
- Negotiate settlements: If you can come up with a lump sum, even if it’s less than the full balance, creditors may accept it to close out the account and avoid litigation.
- Consider credit counseling: Nonprofit credit counseling agencies can help you manage payments through a debt management plan and act as a go-between with creditors.
The bottom line? Being proactive and taking steps to address your debt – rather than just letting it pile up – is key to keeping those credit card companies at bay.
-Don’t Go It Alone – Hire a Lawyer
Look, we get it – dealing with debt and the threat of legal action is incredibly stressful. But here’s the thing: you don’t have to face this battle alone. Having an experienced consumer lawyer in your corner can make a huge difference.At Spodek Law Group, we‘ve helped countless clients fight back against credit card lawsuits and find solutions to get out from under their debt burdens. Our team knows all the ins and outs of consumer protection laws – we’ll make sure your rights are fully protected every step of the way.Trying to take on a credit card company by yourself is just asking for trouble. With our expertise, we can:
- Analyze your full financial situation and legal standing
- Advise you on the strongest defenses for your specific case
- Represent you through all court proceedings and negotiations
- Explore options like bankruptcy if it makes sense for your circumstances
- Take the stress off your shoulders and handle all the legal complexities
Don’t wait until you get that summons in the mail – if you’re behind on credit card payments, the time to act is now. Give us a call at 212-210-1851 or contact us online, and let‘s get started on your defense strategy.At the end of the day, credit card companies are motivated by profits – not by ruining your life over debt. With the right legal team on your side, you can fight back and find a resolution that works for you. We’re here to make sure you don’t get steamrolled by these massive corporations.
Key Takeaways
To sum it all up, here are the key points to remember about credit card lawsuits:
-- Credit card companies sue consumers around 15% of the time for unpaid debts, usually over $2,700
- Lawsuits become much more likely if you’re over 6 months behind on payments
- Creditors consider factors like debt amount, delinquency length, and your ability to pay when deciding to sue
- If sued, you must respond – ignoring it leads to an automatic judgment against you
- You may have defenses like statute of limitations, lack of proof, or bankruptcy discharge
- Being proactive by communicating with creditors and seeking help can prevent lawsuits
- Having an experienced consumer lawyer on your side is invaluable for protecting your rights
So don‘t just bury your head in the sand, folks. If those credit card bills are piling up, it’s time to take action – before you find yourself on the receiving end of a summons. Spodek Law Group has your back; just give us a call and we’ll get to work defending you.
Reddit User Q&A
Let’s take a look at some common questions people have about this topic over on Reddit:
“I’m about 4 months behind on my credit card payments. How much longer until I need to worry about a lawsuit?” – u/OverdueCardDebt
Well u/OverdueCardDebt, you‘re cutting it pretty close there. As we mentioned, that 6 month mark is usually when credit card companies start seriously considering legal action.Our advice? Don’t wait for that summons to arrive. Get on the phone with your creditors ASAP and explain your situation. See if you can work out some kind of modified payment plan to show you’re making an effort. The last thing you want is for them to decide you‘re just blowing them off.
“My credit card debt was included in a bankruptcy I filed 2 years ago. Now I’m getting letters from a law firm saying they’ll sue if I don’t pay up. Can they actually do that?” – u/PostBKDebtTrouble
Thanks for your question, u/PostBKDebtTrouble. In this case, you may have a very solid defense if this creditor does decide to take you to court.When a debt is discharged in bankruptcy, that means it‘s been legally wiped out – the creditor has no grounds to try and collect on it anymore. Their threats to sue over a discharged debt are empty; you can respond citing the bankruptcy discharge order as your defense.Of course, make sure you have documentation proving this debt was included in your bankruptcy case. But assuming that’s all in order, you can tell this law firm to take a hike.
“I only ever had authorized user access on my ex’s credit card, but now they’re suing me for $10k in unpaid balances after we broke up. What can I do?” – u/AuthUserDebtTrouble
Oof, that’s a tough situation u/AuthUserDebtTrouble, but you may have a strong defense here. There’s a big difference between being an authorized user and actually being a co-signer/co-owner on a credit card account.As an authorized user, you had permission to make charges on the card – but you never agreed to be financially responsible for paying off the debt. That obligation falls solely on the primary account holder (your ex in this case).
If you can prove you were only an authorized user and never co-signed or otherwise accepted liability, you can use that as a defense against this lawsuit. Make sure you have documentation showing your status on the account.
“I currently owe about $15k in credit card debt across 3 different cards. I know I need help – should I hire a lawyer or go to a credit counseling agency first?” – u/SeriousCardDebtHelp
Great question, u/SeriousCardDebtHelp. With that level of debt, you’re definitely in the danger zone for potential lawsuits down the road if you can’t get it under control.Our suggestion? Why not pursue both options in tandem? Start by consulting with a reputable credit counseling agency – they can look at your full financial picture and go over strategies for managing that $15k through things like debt management plans.At the same time, it’s wise to also have an initial consultation with a consumer lawyer. They can review your rights, analyze any violations by the creditors, and start preparing a defense strategy in case any of them do decide to take legal action over those unpaid balances.Having that legal backup while also getting your finances organized via credit counseling puts you in the best position to tackle this debt head-on.