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How to respond to a credit card lawsuit

On Behalf of | Oct 18, 2023 | Credit Reporting Errors

Most of us have debt of some sort and in today’s world one unexpected event could suddenly cause your debt to become unmanageable. A sudden illness or injury might result in overwhelming medical debt or the loss of a job could leave you without money to pay the bills.

Many people turn to credit cards in these types of situations to help stay afloat, but unfortunately, all that usually leads to is even more debt in the form of credit card debt.

Credit card debt can pile up quickly and easily. Credit cards are generally easy to get and a good credit score could help you receive a high credit limit. However, you may eventually find yourself in a situation where you are unsure of how many credit cards you have, how much credit card debt you owe and when you last made payments on the cards.

When you fall behind in payments, the credit card company can sue you for the outstanding balance. You will usually receive notice of this lawsuit by being served with a summons and complaint.

This can cause panic and anxiety. After all, you are being sued. You may want to throw the documents away and avoid the situation altogether, especially if you know you cannot pay the money back.

Do not ignore the documents

However, you should never ignore the documents. Read the summons and complaint carefully because they contain important information about your rights and deadlines. Make sure you recognize the debt.

Once you receive the summons and complaint, you have 30 days to respond. You must respond. If you do not file a response, the credit card company, or company suing you on behalf of the credit card company, could receive a default judgment against you.
This means that a judgment is entered by a court declaring that you owe this money without the credit card company having to prove it. The judgment is usually reported to credit agencies so it shows up on your credit report.

Additionally, if you do not have the money to pay the judgment, South Carolina laws allows the credit card company to put a lien on property you own to collect the judgment.

The credit card company must prove their case

This is why you must respond to the complaint by filing an answer with the court. Recognize that the complaint is only a credit card company claiming that you owe them a certain amount of money.

To win the case, they must prove that you agreed to pay them money in exchange for purchases made with the card. This means they must show the credit card agreement you signed. Sometimes they may no longer have this document.

They must also show the exact amount of money you owe and that they are the ones legitimately entitled to the money.

Proving all these things requires producing documentation that credit card companies often do not have. If they cannot prove their case, you can ask for a judgment in your favor.

Additional options that do not require going to court

If you do not want to go to court and fight the lawsuit, but still cannot pay the debt, you can try to negotiate with the credit card company. They might be willing to reduce your overall balance and/or agree to a payment plan. This is sometimes a more attractive option for them, since there is no guarantee that they can prove their case in court.

The bottom line is that you should not panic if you are sued by a credit card company. There are legal defenses and options available to you.