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Can you be arrested for credit card debt?

Is it possible to get arrested because of credit card debt? Well, credit card debt is becoming more prevalent in today’s economy and, while it can seem overwhelming, the last thing you should do is ignore it because it won’t just go away. You are legally bound to pay back your debt to your credit card lenders. Although you cannot be directly arrested for credit card debt, you can be sued and a judgment can be made against you. If you violate the judgment you can be arrested on criminal charges.

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Criminal Versus Civil

Accumulating debt and not paying it back is a civil infringement, not a criminal activity. Therefore, you cannot actually be arrested for being in debt. If you could, more than half the population would be in jail! However, if you are in default of your credit card terms, then the credit card company can file a civil law suit against you, requesting payment owed.

Here is where you can get into criminal trouble. If you are summoned to court, be sure to make your appearance. Some people do not bother going to court because they are confident the judgment will be made against them anyway, but then you risk criminal infringement for failure to appear and now you have a criminal case on top of your civil case.

If you fail to appear in court, you are breaking the law and a warrant can be issued for your arrest. The warrant will not be related to the credit card lawsuit but for failure to appear in court. This will now go on your record as a misdemeanor and can be accompanied by fines, probation, and even a jail sentence depending on the state and the judge. Since this is completely avoidable, it is highly recommended that you go to court when you are summoned.

Credit Card Judgment

Once you appear in court the judge will determine if you owe the debt claimed by the credit card company. There are times when the credit card debt is not yours and was accrued through fraud or other illegal activities to which you had no control. In these circumstances, if you are unable to straighten it out with your creditor and you end up getting sued, be certain to bring all of your paperwork to court so that you can prove your innocence. Also be sure to take the appropriate steps to rectify your credit history.

However, if the credit card debt is yours, the judge will most likely award judgment in favor of the credit card company and hold you liable for your debt. You will be required to pay the debt in full, usually within 30 days of the judgment. Depending on the state where you live, your wages may be garnished, you can have liens placed on your home, and your bank accounts can be frozen. Some states allow the legal removal of your personal property to pay the equivalent of your debt, such as your furniture, your electronics, and your car.

If you do not make payment on the judgment, a warrant for your arrest can be issued. Although the police are probably not going to come to your home or place of work to arrest you, they can do just that; and your warrant will certainly come up if you ever get pulled over for a traffic violation and you will get arrested at that time.

Avoiding Court over Credit Card Debt

The best way to avoid civil or criminal risk with your credit card debt is to simply avoid the debt. Sometimes this is not easy to do, or perhaps you are in a situation where it is already out of your control. If that is the case, you should do everything you can to negotiate with your creditor before it becomes a legal issue.

Most creditors want their money and do not want to pay the expense of lawyers to take you to court. If you find yourself struggling to make your payments, call and speak to someone at the credit card company about reducing your interest or making some kind of payment arrangement. Once this is done, it is in your best interest to uphold the agreement.

The one thing you don’t want to do is just ignore your debt. Keep records of all of your conversations, both written and spoken. Record the date, time, and name of the person you spoke with. If you cannot come to an agreement with your creditor, keep trying and in the meantime make monthly payments no matter how small the amount. This way, if it goes to court, you can show good faith and the judge may be a little more lenient with you.

Debt Settlements and Bankruptcy

Some people may counsel you to wait for the creditor to send you to a debt collector and then see what kind of settlement offer they are willing to make. Although sometimes this does work, there is no way of guaranteeing the steps your creditor will take to collect the debt so this is usually not a good plan. If you are unable to come up with a suitable payment plan or settlement agreement, you may want to consider hiring a professional negotiator to address your situation with your creditor. There can be some hefty fees involved, but depending on your situation, it may be a beneficial route to consider.

The last alternative to consider is bankruptcy. Filing bankruptcy does not simply eliminate your debt. It can actually force you to surrender your monies and property and it ruins your credit in the meantime, so you actually end up in greater debt than when you filed. If you are planning on filing bankruptcy, the two common chapters are 7 and 13. Chapter 13 actually allows you to keep your property, such as your house or car, and gives you a time frame, usually within five years, to repay your debt without having to surrender your belongings. Your credit history will still be sacrificed, but it may be a better option than liquefying all of your assets under Chapter 7. Before deciding on bankruptcy you may want to consider speaking to a professional about your options.

Credit card debt happens and it is not something to be ashamed of or to hide from. Most creditors will work with you to come up with a manageable plan for your budget and you have nothing to lose by trying. The people that end up in court over credit card debt are usually the people that choose to ignore their debt, stop making payments, and refuse to initiate or accept contact with the creditor.

It is important to note that usually you will be unable to use your credit card once you enter into a payment arrangement plan with your creditor. You also may not be able to use your credit card any longer because you have maxed out your credit card limit. Being without a credit card can be a hassle and it can also leave you unprotected in the event of an emergency (such as being stranded on the highway with no money to pay for a tow truck).

As long as you understand your spending habits and adhere to a strict self-imposed budget, there is no reason not to apply for a new credit card. If you are concerned about accumulating additional debt, you can always request a credit card with a maximum credit limit cap that is comfortable for you, such as $1,000. That way you have peace of mind of a credit card for emergencies but you won’t jeopardize your financial account anymore. You can find a variety of credit cards with different interest rates and offers using the Credit Card Chaser tool online now for free and without obligation.

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Disclaimer: This content is not provided or commissioned by American Express, Visa, MasterCard, Discover, or any other credit card company or issuer. The opinions expressed here are the author's alone, not those of any credit card company or issuer, and have not been reviewed, approved or otherwise endorsed by any credit card company or issuer. Credit Card Chaser may be compensated through various affiliate programs with advertisers. As always, Credit Card Chaser is an independent website commmitted to helping people research credit card offers and find the best credit card!

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