How Can I Stop From Being Sued on Credit Card Debt?
Being sued for a credit card debt is a serious matter, and you should try to avoid a court case. The "New York Times" reported in 2010 that credit card companies and debt collectors were much more likely to seek legal action than in previous years. The Times reports that credit card companies used to be content with the tax breaks they received for writing off bad debts. However, as of 2010 that has changed, with the card companies filing scores of lawsuits across the country. Illinois Legal Aid reports that the credit card companies are guaranteed to win in court if they can prove that you legally owe the debt.
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Instructions
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Contact your credit card company before the account is closed and charged off. Credit card companies will often close your account after you fall behind by six payments.
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Ask the credit card company to settle the account for less than the full amount owed -- an accepted debt management tactic called debt settlement. SmartMoney reports that credit card companies will often settle for 20 to 75 percent of the balance after you have fallen at least three months past due. This will prevent a lawsuit.
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Get a settlement agreement in writing and pay the terms as agreed to avoid being sued.
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Tips & Warnings
MSN Money reports that lawsuits are highly unlikely before your account falls six months behind. After six months accounts are generally assigned to collection teams either inside the credit card company or with an outside agency. It is possible to settle even after six months, but the threat of a lawsuit grows significantly after 12 months. You can settle even after being sued. However your leverage for a good deal diminishes after a lawsuit has been filed.
