If you are being sued for an unpaid debt, you have the deadline listed in the court documents to respond to the lawsuit, either on your own or through legal counsel.
If a creditor or debt collector has “served” or sued you for an unpaid debt, carefully review the lawsuit and make sure you reply by the deadline. By taking this step, you can protect yourself and help avoid additional financial difficulties.
You’re not alone. Many Californians find themselves in the unfortunate situation of being sued over unpaid credit card debt. If you’ve received a summons and complaint, don’t panic. This guide will walk you through the process and help you understand your options.
Important things to remember:
- You will not go to jail for having unpaid credit card debt.
- You may be able to negotiate a settlement for less than you owe.
- You have the right to defend yourself in court.
- The creditor must prove that you owe the money.
The typical process of a credit card debt lawsuit:
- Resolve debt before a lawsuit: The creditor may send collection notices and make calls, but they haven’t started a court case yet. This is your chance to resolve the debt or negotiate to avoid a lawsuit.
- Decide what to do if you are sued: If the creditor files a lawsuit against you, you must decide whether to respond or forfeit your defense.
- Respond to the lawsuit: If you decide to defend yourself, you’ll file forms with the court, pay court fees, and inform the other side that you are participating in the lawsuit.
- Prepare for your trial: This is usually the longest part of the process. You’ll gather evidence and use a legal process called discovery to get information from the other side.
- Go to trial: If the case isn’t settled, you’ll go to trial. The court will make a decision ending in a judgment in favor of one side or the other.
- After the trial: If you don’t win the case, the other side will receive a judgment and try to collect what you owe.
Additional resources:
- California Courts Self-Help Guide: This guide provides step-by-step instructions on how to respond to a credit card debt lawsuit in California.
- Consumer Financial Protection Bureau (CFPB): The CFPB has information on what to do if you’re sued by a debt collector, including how to respond to the lawsuit and how to find an attorney.
- Legal Aid: Legal aid organizations can provide free or low-cost legal assistance to low-income individuals.
Remember:
- Don’t ignore the lawsuit. Responding is crucial to protect your rights.
- Seek legal advice. An attorney can help you understand your options and navigate the legal process.
- Don’t give up hope. You have options, and you can fight back.
Don’t let credit card debt lawsuits overwhelm you. Take action, learn your rights, and explore your options. You can overcome this challenge and get back on your feet.
Consult an attorney to learn more about your debt collection rights
If a debt collector has sued you or threatened to sue you, attorneys can assist you in understanding your legal rights at the federal and state levels.
Some attorneys may offer free services or charge a reduced fee. Additionally, you might want to look for a lawyer with knowledge of debt collection matters and the Fair Debt Collection Practices Act (FDCPA). If you meet their requirements, there might be free legal clinics or legal aid offices in your community.
If you’re a servicemember, consult your local JAG office or use the JAG Legal Assistance Office locator to find help or ask your installation’s financial readiness office for information.
Why it’s important to respond when sued by a debt collector
Debt collectors must demonstrate to the court that the debt is legitimate when they reply to a lawsuit. If you owe the money, you and the collector might be able to come to a settlement or other agreement. Responding doesn’t mean you’re agreeing that you owe the debt or that it is valid.
The court may issue a judgment or take other action against you if you don’t answer; this is sometimes referred to as a “default judgment.” For instance, the court may interpret your refusal to accept delivery or “service” of the lawsuit as your disregard for one that has been duly served, so it’s unlikely that this strategy will help you defend yourself against the lawsuit.
Because of this, it’s likely that you will have a judgment entered against you for the amount the creditor or debt collector believes you owe, plus any additional fees that are permitted by the judgment to cover interest, costs of collection, and legal fees.
Judgments also give debt collectors much stronger tools to collect the debt from you. If you think you don’t owe the money or that the amount is incorrect, you might not be able to contest the debt. In addition, the creditor might be able to:
- Garnish your wages
- Place a lien against your property
- Move to freeze funds in your bank account
Since a judgment is an order from the court, it can be very challenging to have it overturned or modified after the case is over. If you defend the case, your chances of fighting a collection in court are significantly higher than if you wait to be entered into a judgment against you. Before a court renders a decision, you might also be able to negotiate a settlement or compromise with the debt collector.
Being Sued By Credit Card Company
FAQ
How likely is it for a credit card company to sue you?
What happens if you ignore credit card lawsuit?
What happens when a credit card company sues you and you have no money?
Can you sue a credit card company for unpaid debt?
Suing over credit card debt is a different type of lawsuit. Your creditors can sue you for unpaid debts, and you may need to consider filing for bankruptcy in some cases. You can also sue a debt collection agency or credit card issuers for harassment and other legal issues.
What should I do if my credit card company sues me?
First, you should verify the debt. While your liability should be clear if your credit card company sues you directly, sometimes it’s not that straightforward. Debt collectors you’ve never heard of can purchase your debt and sue you for it, and the debt may be inflated by fees and penalties. Mistakes or outright fraud can happen.
How long can you sue a credit card company?
Some states allow creditors to sue over an unpaid debt for up to 15 years, while others set a limit of three years. If your credit card company or a debt collector notifies you of a lawsuit with the service of a summons and complaint, you will typically have up to 30 days to respond.
Can you get sued for delinquent credit card debt?
Here are some situations when you might get sued for delinquent credit card debt, the steps in a lawsuit, and how to defend against a suit. If you’re delinquent on your credit card payments, the credit card company or a debt collector hired by the credit card company might sue you to recover the money you owe.