It seems that most people in their lifetime, will be late on a credit card payment or miss a payment altogether. While this can affect your credit score to a small degree, this occurrence is little more than a mere blip on the screen. However, if you have grossly neglected a credit card bill and one day you are awoken by the sound of your local county sheriff knocking on your door with a court summons in hand informing you that you are being sued by your credit card company, that is when you know things have gotten out of control. While being sued can be the stuff of panic attacks it is important to stay calm and cool and try to figure things out and not let your emotions get the best of you.
What to do when I am served?
When you are delivered a summons informing you that a suit is being brought against you for a credit card debt, the first thing to remember is that this summons will need to be formally answered. This is a vital part of any suit brought against you and it is important that you answer in the allotted time. Most states will give a period of 20 to 30 days for you to answer the suit. Answering the court concerning your suit, often known as a notice to appear, will inform the court that you are actively participating in the proceedings. It also allows you to be informed of all motions, documents, or filings that are relevant in your suit.
The reason why an answer is important is that if you fail to answer the suit in the time allotted you can risk the court issuing a default judgment in the matter. This means that the door will be open for the plaintiff to try to recoup the money presumably owed by means of wage garnishing, freezing bank accounts, property liens and in more serious cases, failure to answer can even lead to issuances of a bench warrant for you arrest; not because of debt owed, but because you ignored a lawful summons.
How do I answer a suit?
While formally answering a suit in a timely fashion is important, what is even more important is to know how to answer. This is where you will need to make good use of the time allotted you by the courts to answer the suit.
What you will need to do first is to check your local court rules as well as the documents that you were originally served with. Many local court rules as well as state laws will require the summons or notice of suit is to be accompanied by the contract you signed and agreed to when you initially opened the credit card account. This contract is known as a written instrument. This requirement will vary from state to state so it is vital that you look to see if your state requires this.
If your state does require the accompanying written instrument but your summons does not have any such document, then this may be grounds for filing a motion to dismiss for failure to comply with court rules. Generally, the court will give the plaintiff a period of 30 days to provide the necessary documentation or risk having the case dismissed with prejudice.
The next thing to do is to check local court and state laws to see if you can file a motion for dismissal before you actually answer the suit. Once again, this will vary from state to state. It is important that you make sure that you are clear on the state laws governing this sort of procedure. In some states, you can file a motion to dismiss in lieu of an answer; however, in other states you must answer the summons first. The catch is that, depending on state laws, if you can file for dismissal before you answer and you decide to answer first, you may find that asking for dismissal later on might be difficult, if not impossible.
You will also need to check to see what your state’s statutes of limitations are regarding credit card suits. As with most state laws, the time limitations will vary. To know how this pertains to you, you will need to know the last date a payment was made to the account pertaining to the lawsuit. With this information, as well as the date the suit was filed at the court clerk’s office, you can determine if this time exceeds your state’s time limitations. If it does, you can file a motion to dismiss because the suit action is time barred.
Answering a suit is not only important in regards to keeping the court informed that you are aware of the proceeding being mounted against you, but it will also serve to weed out the legitimate claims from the illegitimate ones. Credit card companies sue people all the time and many of these suits have merit; however, unscrupulous collection agencies and junk debt collectors will often try to use the courts to intimidate people.
These collectors hope that a person will roll over and play dead, in a manner of speaking. However, many of these collectors or agencies merely bought the existing debt for pennies on the dollar. They often have little to no documentation regarding the debt. In other cases, the debt is too old to legally collect on.
A growing number of people are being sued for debt that is not even theirs. Since little other than a name is attached to the debt these collectors purchase, often times, collectors simply find a name that matches and they go after that person, even if it is the wrong person to begin with. When these collectors and agencies are pressed, they will often not respond to the courts demand for documentation or they will simply drop the suit against you.
In the cases where the suit is on the level, you are going to have to deal with this situation. However, it is worth noting that most credit card companies are not interested in going to trial and most civil actions involving credit card balances never make it that far. Many states require that credit debts that are under a certain amount go directly to mediation rather than to trial. This allows the credit card company, as well as the debtor, with the help of a mediator, to work out a repayment schedule that is satisfactory to both parties.
Important Things to Remember
When you are being sued for a credit debt, it is important to communicate only with the courts. In some case, your summons papers will advise you or your representation if you have it, to try and workout a payment schedule before your court date, in hopes of avoiding any legal proceedings, both civil and criminal. However, it is important to remember that the credit card company and its lawyers do not work for you and they do not have your best interest in mind, they just want to be paid.
Even if you are able to hammer out an agreement between you and the debtor, you must get that agreement in writing and submit that agreement to the court. It is not uncommon for a person to workout a repayment plan with a creditor only to find that the credit company did not withdraw the suit against them. In this case, you may then have a default judgment against you. Remember that the only way you will have any recourse is to deal directly with the courts and have little to no contact with your creditor unless so ordered by your representation or the courts.
It is also important that you review your credit history to see if you own the debt that you are being sued for and if the amount of the debt is correct. If the information that the credit card company or debt collector is using does not match your information, request proof of documentation with a request for dismissal if they do not provide it for you.
If the debt is yours, if at all possible, try to pay off the debt in full to avoid any further interactions with the company. You may be able to negotiate a pay off at a reduced rate, especially if the additional fees are associated with finance charges and late fees, etc. If not, answer the suit in a timely manner and fashion.