what to do when you get a letter from a lawyer about a credit card

You Should Contact Your Attorney The first thing you should do after receiving a debt collection letter from a lawyer is read through it. After you understand more of what the letter is about, you should contact your own lawyer to discuss it.

Full Answer

What do you do if your credit card company owes you?

Show up. You have to either hire a lawyer or go to court to file papers within the period of time provided for under the law (a phone call to the credit card company’s lawyers won’t protect you). If the court schedules a hearing, you or your lawyer have to appear in the right place and at the right time.

Do you need a lawyer to file a credit card lawsuit?

You have to either hire a lawyer or go to court to file papers within the period of time provided for under the law (a phone call to the credit card company’s lawyers won’t protect you). If the court schedules a hearing, you or your lawyer have to appear in the right place and at the right time.

Should debt buyers avoid lawsuits to collect old credit card debt?

Many people think debt buyers prefer to avoid lawsuits to collect old credit card debts because it requires them to pay lawyers and incur costs of litigation. If this were true, however, credit card lawsuits would be far less common than is the case.

What does it mean when you get a letter from a lawyer?

If you get a letter from a lawyer, that doesn’t necessarily mean that you’re being sued. Many collection law firms are, in fact, collection agencies in disguise, with large collection departments.

How do you respond to a credit card lawsuit?

The best tips for drafting an Answer to your debt lawsuitThe Answer isn't the place to tell your side of the story in depth.Deny, deny, deny.Include your affirmative defenses.Use standard formatting or “style”Include the Certificate of Service.Sign the Answer.

Can I get sued for not paying a credit card?

In short, yes they can technically sue you. After 180 days of missed credit card payments, your credit card company might do three things: They can charge off the debt without ever filing a lawsuit, most likely because the debt amount is under $8,000 and not worth incurring extra legal fees.

Can you settle credit card debt after a lawsuit?

You can resolve your debt after the suit is filed by sending a Debt Lawsuit Settlement Letter. After filing your Answer into the case, you should begin the process of negotiating a settlement. Most creditors/collectors want to reach a settlement, and they will often settle for less than the amount you actually owe.

How likely is a credit card company to sue?

Credit card companies sue for non-payment in about 15% of collection cases. Usually debt holders only have to worry about lawsuits if their accounts become 180-days past due and charge off, or default. That's when a credit card company writes off a debt, counting it as a loss for accounting purposes.

Can I go to jail for credit card debt?

The short answer to this question is No. The Bill of Rights (Art. III, Sec. 20 ) of the 1987 Charter expressly states that "No person shall be imprisoned for debt..." This is true for credit card debts as well as other personal debts.

Can credit card companies take your house?

Fortunately, your home is safe from any creditors who do not have a mortgage or lien on it. Credit card companies and other unsecured loan holders can't come and simply take your property or home after missing a few payments. A creditor will first start making collection attempts by mail, phone calls or other methods.

Can you go to jail for not paying a Judgement?

You cannot go to jail for not paying your debts when there is a judgment against you. You can, however, be liquidated, sequestrated, an emoluments attachment order placed on your salary or your assets attached.

What percentage will credit card companies settle for?

Typically, a creditor will agree to accept 40% to 50% of the debt you owe, although it could be as much as 80%, depending on whether you're dealing with a debt collector or the original creditor. In either case, your first lump-sum offer should be well below the 40% to 50% range to provide some room for negotiation. 5.

What happens when a credit card company files a Judgement against you?

A judgment gives the creditor the right to use additional collection methods to collect the debt owed to them. For example, if the credit card company proves to the court that you owe $5,000, a court may enter a judgment saying that you owe $5,000 (plus costs and interest).

Can a debt collector take you to court after 7 years?

Under the Fair Credit Reporting Act, debts can appear on your credit report generally for seven years and in a few cases, longer than that. Under state laws, if you are sued about a debt, and the debt is too old, you may have a defense to the lawsuit.

What happens to unpaid credit card debt?

If you default on a credit card, loan or even your monthly internet or utility payments, your account could be sent to a debt collection agency. Unpaid debts sent to collections hurt your credit score and may lead to lawsuits, wage garnishment, bank account levies and harassing calls from debt collectors.

What happens if I don't pay a credit card?

Consequences for missed credit card payments can vary depending on the card issuer. But generally, if you don't pay your credit card bill, you can expect that your credit scores will suffer, you'll incur charges such as late fees and a higher penalty interest rate, and your account may be closed.

Why Might a Credit Card Company Decide to Sue?

When you don’t keep up with your credit card payments as promised, there are several ways your credit card company can try to compel you to pay. Your card issuer may call you, write you or bring a third party debt collector into the picture.

How Does a Debt Collection Lawsuit Work?

Debt collection lawsuits can vary depending on your state of residence. But, in general, you’ll receive a summons after the attorney files a complaint in state civil court to initiate the process of suing you.

Find Out If You Qualify For Debt Relief

It’s normal to feel stressed out if someone sues you for unpaid credit card debt. And while it is important to take prompt action, you also want to try to remain calm and keep your situation in perspective.

Why do creditors write letters to lawyers?

The reason creditors do this is because it looks more official and might push a debtor into repayment when lawyers are involved.

What to do if you receive a letter from a debt collection attorney?

If you received a letter from a debt collections attorney, you might not understand what is happening. Contacting your own lawyer can help you through the situation. Contact a bankruptcy lawyer today.

Can a lawyer be sued for debt?

Lawyers Can Act as Debt Collectors. You’re not being sued every time you receive a letter from a lawyer. There are several situations in which lawyers can act as debt collectors, but if the lawyer takes on that role, it’s the only role he or she can perform in the case.

What to do if you are sued for credit card debt?

If you are sued for credit card debt, your first step is to verify that the debt is actually yours. The Fair Debt Collection Practices Act requires debt collectors to provide a validation letter listing specific details about the debt, including the current creditor and the amount of debt owed.

How long do you have to respond to a credit card summons?

When you get a court summons for credit card debt, pay attention to it—and make a plan of action. In many cases, you’ll have 20 to 30 days to respond to your summons, so read it carefully to learn exactly how much time you have to develop your plan. You might be tempted to ignore your court summons, either because you don’t think ...

How long does it take for a credit card to turn over to a debt collector?

An occasional missed credit card payment might lower your credit score or raise your interest rates, but after four or five months of missed credit card payments, your credit card issuer might turn your account over to a debt collector.

What to do if you don't believe a debt is yours?

If you do not believe the debt is yours—or if you don’t know whether or not the debt is yours—you have the right to request additional information. Write a debt verification letter asking your debt collector to confirm you owe this debt.

Can a debt collector issue a summons?

Generally, debt collectors don’t issue a court summons unless they’ve already made other attempts to collect on the debt. Suing someone over an old debt is the last step in the debt delinquency timeline, not the first one.

Does Bankrate help with credit card debt?

Use these resources to help you manage your credit card debt instead of ignoring it; you don’ t want to get to the point where you are being sued over credit card debt.

Does Bankrate include credit card information?

While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Many people have trouble paying their credit card debts—but not everyone realizes that they could be sued for unpaid credit card debt. An occasional missed credit card payment might lower your credit score ...

What to do when you get a credit card lawsuit?

When you get court papers about a credit card lawsuit, you have a choice: take no action, or use the laws to level the playing field. The debt collectors have done everything possible to convince you they have all the power, but that’s not true.

How to get credit card debt information?

Organize any documents you have. Go through your files, bank account records, and old mail to get any information you may have about the credit card debt. Even if you don’t think a document is important, it may contain helpful clues. Get your most recent paystub and tax return.

What does it mean to be sued for credit card debt?

Being sued for a credit card debt merely means that someone is claiming you borrowed money, that you failed to pay, that the balance is what they claim it to be, and that you are legally obligated to pay this company. Do nothing, and the court will assume the debt buyer is telling the truth.

How many credit card lawsuits were filed in 2011?

If this were true, however, credit card lawsuits would be far less common than is the case. In fact, there were nearly 200,000 credit card collection lawsuits filed in New York in 2011 alone. Moreover, a report by ProPublica found that these lawsuits accounted for 48% of the court judgments filed in New Jersey in 2011.

Why are credit card lawsuits so common?

Credit card lawsuits are common because they are profitable. Over 95% of consumers do nothing when they receive court papers because they have become convinced that there’s no way to prevent a judgment from being filed against them.

What happens if you don't file a debt collection lawsuit?

If you don’t do what you’re required to do, the creditor wins a judgment against you. That’s why it’s important to always show up – there’s no legal excuse for forgetting to file papers with the court or for failing to hire a debt collection lawsuit defense lawyer on time.

What do debt buyers do when they buy credit cards?

When a debt buyer purchases your credit card account, the first thing they do is send a letter or make a phone call asking you to make a payment. By the time that happens, you have been getting the regular statements for a few months.

What to do if a credit card company sues you?

There’s a sports adage that the best defense is a good offense. If a credit card company sues you, one strategy is to challenge its right to do so. It’s the plaintiffs’ responsibility to prove that you owe them money. Make them do it. Debt often gets sold, so ask for documentation of a credit agreement that you signed and proof that the paperwork is accurate and came from the original creditor. This can be done without a lawyer.

What happens if you don't show up for a credit card lawsuit?

If you don’t show up for the court proceeding, the judge automatically rules against you and will order you to pay the full amount. Credit cards are unsecured debt — meaning there’s no collateral at stake, such as a home or car — so the lender has limited options for collection.

How many calls can you get from a debt collector?

If you have five debts, that does mean you could get 35 calls – but you’d only have to have five conversations. The second part of the rule says that debt collectors are required to provide consumers a validation notice either immediately or within five days of contacting the person they believe owes the debt.

What happens if you default on credit card debt?

Debt has consequences, some of which will surprise the average American. For example, if you default on credit card debt the major consequence could be a lawsuit. Hold on.

Why are credit card companies not infallible?

The credit card companies did not become infallible because time has passed since those articles were published. Make sure the debt is yours, the identity is yours and the charges are yours.

Can you sell debt to a collection agency?

Avoiding phone calls will accelerate that process. Sometimes, if a lender decides that collection attempts aren’t financially worthwhile, the debt can be sold to a collection agency, which means a new set of collectors will go to work on you. Your debt could be sold again and again.

Do lawyers work for free?

Lawyers don’t work for free, and court cases cost everybody money. So the credit card company has some incentive to avoid going to trial. The company might initially put up a fight, but the attending supervisor likely will be interested in simply recovering as much of the debt as possible.

What happens if you wait too long to pay a credit card?

If you wait too long before making a payment, the credit card company may use a collection agency to attempt to collect the debt. The credit card company might give up on you and sell your debt to a debt-buying company. Collection agencies will continuously call you. They will send a lot of collection letters.

What happens if you default on a credit card?

If you fail to make your credit card payments, credit card companies will make your life more expensive by charging late fees and higher interest rates. These creditors will report negative information to the credit bureaus, which will then be entered into your credit history.

How long does it take for a debt collector to send a written notice?

Debt collectors must send this written notice within five days of the first date they have contacted you.

What happens if a collection agency fails to collect a debt?

If a collection agency fails to collect a debt, then the original creditor or the debt-buyer (if the debt has been sold), may hire a law firm to collect the debt. The law firm will likely sue you. When you're sued, you will receive a summons and complaint.

What happens if you don't answer a lawsuit?

If you fail to answer your lawsuit's complaint, the court will enter a default judgment against you. To use a sports analogy, a default judgment is like forfeiting a game. In other words, if you don't file your answer within the time allowed, you lose automatically.

What happens when you are sued?

When you're sued, you will receive a summons and complaint. These documents let you know what you're being sued for, who is suing you, and how much time you have to respond. Your response is called an "answer.". How long you have to file your answer will depend on your state's laws.

Can a debt collector contact you?

The FDCPA forbids debt collectors from contacting you if you have an attorney representing you regarding this debt. The debt collectors must also stop contacting you if you send them a written demand to stop. The FDCPA requires debt collectors to provide you with a written notice informing you of.