Sued For Credit Card Debt- Now What?

judges bench

The days of debtor’s prison are in the past, however it is still possible to face legal consequences for unpaid credit cardjudges bench debt. As long as you have not broken any laws (such as knowingly and fraudulently racking up debt you have no intention of repaying) you don’t have to worry about going to jail, but you can be sued. Credit card companies have the right to attempt to receive payment for unpaid credit card debt. In most cases they try every avenue possible before turning to the court system. This means if you have received notification that you are being sued, things have gone from bad to worse in regards to your financial situation. The funny thing about debt is it never goes away. Yes, the statute of limitations may expire or any number of other things that make it appear to disappear, but without dealing with your debt it will always follow you in the future. Once you have been sued for debt, you can no longer pretend it doesn’t exist. Accepting the reality of the situation will likely lead to the following questions.

How do I know if I’ve been sued?

Once your credit card company takes action against you, you will be served a summons from the court. You may receive this summons via a process server, certified mail or even a sheriff’s deputy. After you have been served, you will have the following options: do nothing which will result in a judgment being filed against you, contact your creditor to work out a plan or answer the summons by appearing before a judge.

How do I proceed if I go to Court?

Being summoned to appear before a judge is rarely a pleasant experience, however you should not let fear keep you from dealing with the situation. When you go to Court it is important to speak honestly and directly with the judge. If you truly do not have the money to repay the debt, yet show signs that you are willing to work out a payment plan or some other scenario to rectify the situation, a judge may hold off in setting a legal judgment against you. This will only be successful if you are willing to hold up your end of the bargain, therefore if you are granted the opportunity to make good on your debt, you better do so.

What happens if I choose to ignore the summons?

If you decide to ignore the summons (not advised) or lose your case in court, there will be a legal judgment entered against you. This will result in information being reported to the credit bureaus which will have a negative impact on your credit. Beyond damage to your credit, you might find your wages are garnished or assets are seized as payment for unpaid debt. Since this can go on for years, you should do everything in your power to avoid having a judgment entered against you in the first place.

The best way to avoid this situation is by dealing with your debt before it gets to this point. Most consumers today are all to familiar with financial struggles and although credit card companies are not exactly in your corner, you would be doing yourself a favor by trying to deal with them directly versus in a court of law.