3 Things to Do ASAP If Your Credit Card Company Sues You

If you can't pay your credit card bill and the situation goes on for a couple of months, after sending you statements, threatening letters and making some increasingly aggressive phone calls, it's very likely that you will be sued either directly by the credit card company, a collection firm acting on their behalf or a company that bought your credit card debt from the card issuer. If you get a notice that you're being sued over your unpaid credit card(s), you need to act swiftly and take these three actions to protect yourself.


#1 Don't Ignore the Lawsuit
This is at the top of the list because it's the most important piece of advice we can offer you. Never, ever should you ignore a notice that you're being sued by someone. You may be tempted to put your head in the sand because you don't have the money to pay, but that's the worst thing you can do. By not answering, you are essentially telling the court “Go ahead and rule against me” and they will. The credit card company (or other filer) will get a default judgment they can then use to seize your assets. Filing a response may discourage the creditor from pressing on. Or, your response may convince them you have no ability to pay so they'll drop the matter.

#2 Request a Copy of the Cardholder Contract
In addition to responding to the lawsuit, you should contact the plaintiff's attorney that's listed on the lawsuit and request a copy of the credit card agreement. In many cases, credit card companies can't produce contracts their customers signed. And when they transfer the debt to companies that are collecting on it or to whom they sold the debt, it's even harder for these firms to produce the documents that justify the debt. The core of the lawsuit against a credit card holder for non-payment is that you have breached the contract. But if they can't produce the contract so that the terms can be confirmed, it's hard to accuse you of breach. This may help end the lawsuit.

#3 Consider Settling or Bankruptcy
If you respond to the lawsuit and they can produce the contract and don't drop the case, there are still alternatives to help you deal with this debt. First, if you have some money on hand, you may be able to negotiate a reduced settlement to resolve the case. Alternately, if you go to court, you may be able to offer reasonable and affordable payments to settle the case – especially if you can show the debt won't be collectable otherwise. Finally, if you have several lawsuits pending against you for debts you can't afford to pay, you may want to consider a Chapter 7 or Chapter 13 bankruptcy to either have these unsecured debts discharged or to get more time to pay them and put an end to collections activity.