How to Avoid Getting Sued Over Old Credit Card Debt
Getting sued for an old credit card debt can end with a judgment on your credit report if the judge finds you guilty. But instead of going before a judge and risking long-term credit damage, deal with your creditor outside the courtroom and get your account back on track.
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Communicate with your credit card company to pay an old charge-off. Credit card companies may charge off or write off debts after six months of nonpayment but then later sue for the balance. Avoid a future lawsuit by communicating with your credit card company and agreeing to pay a charge-off. If the card company sold the account to a collection agency, speak with the collection agency about paying off the debt.
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Resume making at least the minimum payment. If the account isn't a charge-off yet, avert a lawsuit over an old debt by contacting the old creditor and making plans to resume paying the debt. Begin forwarding at least the minimum payment each month. If you can't afford the minimum, talk to your creditor to see if you can get a payment reduction.
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Ask a lawyer about the statue of limitations. Each state varies, but if the statue of limitations for an unpaid debt has passed, credit card companies cannot sue you in court for an old debt. The statue of limitations starts from the date of the last account activity. Making a payment or agreeing to make a payment to your credit card company restarts the statue of limitations clock, says Bankrate.com.
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Escape a lawsuit with a bankruptcy filing as a last resort, and only if you need relief from debt and protection from present and old creditors. A bankruptcy remains on your credit file for 10 years; but with the automatic stay associated with bankruptcy, creditors can't contact you about new or old debts or sue you once you file bankruptcy papers.
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