When a Credit Card Sues, Do They Have to Serve Papers?

You could face a lawsuit for your unpaid credit card balance.

A credit card company has several options when you stop sending in payments. The company can charge off the debt and claim it as a tax loss, sell the debt to a third-party debt collector or file a lawsuit against you for the full amount you owe plus fees and interest charges. While all credit card companies' policies differ, creditors sue most frequently for debts that exceed $1,000. Should this occur, you will receive notification of the pending lawsuit via a summons and complaint.

Summons and Complaint

A summons and complaint, often referred to simply as a "summons," serves as official notification of the lawsuit to the defendant. The summons itself informs the defendant of the date and time of the scheduled hearing and orders him to appear in court on the assigned day. The complaint details the reason for the suit and the amount the plaintiff demands. Although the summons and complaint forms will differ, depending on your state of residence, all contain this basic information. If a credit card company sues you, it must file a copy of the summons and complaint with the court and serve you with a copy.

Service Requirements

Each state possesses its own requirements regarding service of the summons and complaint. A common misconception exists that the plaintiff must hire a process server and serve you the paperwork in person. This is not always the case. Although the plaintiff has the option to hire a process server---usually through the county sheriff's department---it can also send the paperwork to your last known address via certified mail. If the credit card company cannot locate you and serve you the summons and complaint in person or via mail, some states, such as Alaska, provide it with the option to publish your summons and complaint in the local newspaper. The court then considers you appropriately served.

Filing a Response

After receiving the summons and complaint, you have a limited amount of time--- usually from 10 to 30 days, depending on your state---to file a formal answer with the court. If the credit card company does not include an answer form with its summons and complaint you can request one from the court. Your answer to the lawsuit should state whether or not you agree with the credit card company's assessment. If not, you must include a reasonable defense to the lawsuit, such as an expired statute of limitations for debt collection in your state or the fact that you do not believe you owe the debt.

Failure to Serve

If you do not file an answer with the court within the time frame allowed, the court grants your creditor a judgment against you by default---giving it the ability to garnish your bank accounts and wages. Unfortunately, some unethical creditors intentionally neglect to serve defendants or serve paperwork to the wrong address in order to obtain a default judgment. If you receive a judgment against you on account of improper service by the credit card company, you have the right to appeal the judgment on those grounds and request a new hearing.

References

• Neighborhood Economic Development Advocacy Project: Debt Collection Basics
• Alaska Court System: How to Serve a Summons in a Civil Lawsuit
• New York State Certified Court System: Starting a Case
• Michigan Legal Aid: Responding to Summons and Complaints in Consumer Cases
• Neighborhood Economic Development Advocacy Project: Vacating a Default Judgment