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Debt Management Law News

April 20, 2010

Can You Be Sued for Credit Cards?

When you sign a credit card contract, you are agreeing to the credit card provider's terms -- including the condition that you will pay what you owe, plus any fees. If you do not adhere to the contract, the credit card company has the right to sue you for the debt. It is more common, however, for a credit card company to sell your unpaid debt to a collection agency which will then file a lawsuit against you.

The Facts
1. If a creditor files a lawsuit against you and the judge sides with the creditor, a judgment will appear on your credit report. Depending on your state's laws, the creditor may then proceed to garnish your paychecks or bank accounts.

Time Frame
2. The statute of limitations (SOL) in your state will dictate how long a creditor has to file a lawsuit against you for a debt. If the SOL has expired and the creditor attempts to sue, notifying the court of the expired SOL will result in the lawsuit being dismissed.
Benefits
3. You have the right to appear in court and contest a lawsuit over unpaid credit card debt. If the creditor cannot prove that you accrued the debt, the lawsuit will be dismissed.

Considerations
4. Not every creditor will opt to sue to recover a debt. The debt must be large enough to make the chance of recovering it worth the cost the creditor incurs by suing. Your odds of being sued vary depending on where you owe the debt as well as the amount owed. In general, debts in excess of $1000 offer creditors greater financial motivation to file a lawsuit.

Misconceptions
5. It is a common misconception that a wage garnishment order from a lawsuit can apply to any type of income. This is not the case. Credit card debts are serviced by private creditors rather than the federal government and are thus limited on the types of income they may garnish. As a rule, Social Security checks, tax refunds and government retirement income cannot be garnished by private creditors.

Sometimes, debt can be overwhelming, and bankruptcy becomes necessary.
Bankruptcy can sometimes be difficult. If you are considering bankruptcy, contact the Houston bankruptcy lawyers of Weston & Associates, PLLC at 713-623-4242

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