If you’re deep in debt, you’re probably worried about what actions your creditors can take against you. You might already know that student loan creditors have far-reaching powers, but what about credit card companies? Can credit card companies sue you? The answer is ‘yes,’ they can sue you and even garnish your wages and bank account.
Why Lawsuits Happen
Before we delve into the ramifications of a credit card company lawsuit, we need to talk about why lawsuits happen in the first place. The reason credit card companies file lawsuits against debtors is because the borrower is not paying and not communicating with them. That’s right, ignoring your creditors could actually become a contributing factor in having a lawsuit being filed against you. Even if you can’t pay right now, you need to talk to your creditors and let them know why you’re unable to pay.
Timing
Every credit card company is different, but there are few things they have in common when it comes to the timing of lawsuits.
- It happens after severe delinquency. You need to be at least six months late in most cases before a credit card company will consider suing.
- They send warning letters. If you’re worried about a sneak attack in the form of a lawsuit, you can relax, that doesn’t really happen. Remember, credit card companies just want to get paid. Before they sue you, they’re going to send threatening letters warning you that they will take legal action if necessary. Take these letters seriously.
You can usually stop the lawsuit process by offering (and honoring) a repayment arrangement. Or, you can stop the lawsuit process with a bankruptcy filing—we’ll discuss that in more detail a little later.
Consequences
If you’re sued by a credit card company, it’s almost guaranteed that you will lose. The only exception is if you didn’t incur the debt.
Bankruptcy
Filing bankruptcy is the only guaranteed way to stop a creditor lawsuit (other than paying the debt in full). Once you file bankruptcy, all collections activity must cease.
If you want to know about how bankruptcy can protect you from a credit card lawsuit, talk to an attorney today.
