What can you do if your credit card company is suing you for nonpayment?

Credit card companies have limited resources when it comes to getting paid if you have stopped paying them for any reason. They cannot garnish wages. They have nothing to repossess as credit cards are typically unsecured. They must simply wait, contact you incessantly, give your account to a collections agency; or they can start legal proceedings. If your credit card company is suing you for nonpayment, there are some things that you can do to help get the situation under control.

Evaluate the Situation

The first thing you will want to do is to evaluate your financial situation. If it is indeed accurate that you owe the credit card company money and past efforts have not resulted in an agreement between you, this is the next logical step for the lender. In addition, by going to court you will have a chance to explain your side of the situation and may have the opportunity to pay less than the total amount of the bill.

A judgment against you in such a case will appear on your credit report for 7 years. This is the same amount of time a bankruptcy appears on your credit report. If you are struggling with more debt than you can deal with, you should at least consider bankruptcy. While it is not the ideal solution, and it will trail you for many years to come, if you are ready to start afresh, a bankruptcy can help you do just that. By filing for bankruptcy, you will also stop the legal proceedings for nonpayment. Creditors cannot even contact you once you have filed for bankruptcy.

If you happen to receive notification of a lawsuit from your credit card issuer and it is for charges you did not incur, you may need to investigate the situation to see if you have been the victim of identity theft. Often victims of such crimes are unaware that someone else has been using their identity until they order a credit report, get refused credit or receive notification of an impending lawsuit for nonpayment. If you have been victimized in this way, contact the credit card issuer, law enforcement and the Federal Trade Commission to report it.

Seek Professional Help

If you are being sued by a credit card company, you will want to contact a lawyer and get professional help. Even if you cannot afford a lawyer, there may be free legal aid available to you. It is important to not ignore any legal notices that you receive. If worse comes to worse, show up in court by yourself so that you do not automatically lose the case. If you fail to show up for court, chances are the judge will deem you responsible for the full amount of the lawsuit and can even put a wage garnishment in place.

Seeking legal help is the way to go when a credit card company is suing you. A lawyer will also help you make decisions that are best for your financial situation. He or she will best be able to provide guidance as to the best route to take that will incur the least damage to your credit in this situation.

Minimize the Damage

If you are indeed at fault and have not repaid a credit card, but you are capable of doing so, you may want to attempt negotiating with the company. Be sure to deal with someone who has decision making power on behalf of the lender. Offer a significant percentage or even the full amount in exchange for the lawsuit being dropped. If it is agreed to, get it in writing before making the payment. This will help to avoid the damage of having a judgment on your credit report for the next 7 years.

If you can not repay the amount you owe and are sure that there will be a judgment against you, make sure that your home is protected with a homestead exemption that has been properly filed. This will protect it from being seized in order to pay the overdue credit card bill.

You will also want to take steps to minimize the damage to your credit. In all likelihood, the credit card in question is no longer active for further charges. Focus on getting other debts under control and paid off. Incur no new debt unnecessarily. However, it is in your best interest to get a new credit card, especially if the one involved in the legal proceedings was a major credit card. Be sure to use the new card carefully, just enough to prove that you can handle credit but not excessively. Always pay on time and in full when possible.

If you are looking for a new credit card to rebuild your credit, put the credit card chaser tool to work for you and in no time you’ll have the perfect credit card to meet your needs.