What Can I Do If My Credit Card Company is Suing Me?

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Q:  I have credit card debt and 2 personal loans. I have gone through financial hardship and have not been able to pay. Today I got served by court papers where a credit card company is suing me to get their money. I have never gone through this before and I am overwhelmed. I don’t know what to do. I don’t have the money to pay up front. What can I do? Where can I start?

Dear Reader,

It is only natural to feel overwhelmed with this situation, especially if you don’t know where to start. Take a deep breath. You are already moving in the right direction, looking for resources to deal with this situation. Ideally, you should try stop the lawsuit. You can attempt to get a debt settlement agreement with the creditor if you can afford the monthly payments. If this is not possible, you should get informed about the process and know what to expect.

A good place to start is to carefully review the documents you received in the mail. Make note of the deadline to submit your answer to the complaint at the court and of the name of the lawyers representing the creditor. From now on, if you need to contact the creditor, you will have to go through the lawyers. Next, you should know where you stand. Gather creditor statements, letters, emails or any documents that you find about this debt, even if you think they are old or irrelevant. Also, get copies of your latest paystubs and tax returns. It is important that you organize your financial documents to know how much you can expect to pay or if your property or assets can be seized if a judgment is entered against you. Once you have these documents ready, consider working with collection defense lawyer.

You are not required to hire an attorney, but it’s preferable. If you cannot afford it, look for free or reduced-cost programs in your community, like the local bar association or legal aid. But, whether you determine to go on your own or work with legal representation, you have to make sure you follow the court’s instructions. If you miss deadlines or your hearing, the judge may enter a judgment against you.  If that happens, your creditor will have the legal right to garnish your wages or seize your assets.

Depending on your situation and the documents you have about this debt, you may be able to defend against this type of judgment. For instance, some people with low income and who meet certain criteria may be judgment proof. There are state and federal laws to protect consumers and set how much a creditor can garnish and how much of your property can be seized.

During this process, I also recommend that you talk to a NFCC-certified credit counselor. Although your credit counselor cannot provide legal assistance, they can connect you with resources, and most importantly, they can work with you to manage your finances at this difficult time. It is important you know that you are not alone in this and help is available a phone call away.

Matt Ribe, General Counsel

Matt Ribe is the General Counsel for the National Foundation for Credit Counseling (NFCC).  At the NFCC, he is responsible for government relations at the state and federal level as well as managing the organization’s Board of Trustees and member governance committees.  Ribe is heavily involved in the Coalition of HUD Intermediaries, where he serves as co-chair of the Advocacy Committee.  Well versed in the federal student lending programs, Ribe serves as the NFCC’s Subject Matter Expert on student loans and has appeared on ABC News 7 in Chicago and other news publications.

If you have a question about your own specific financial situation, don’t hesitate to submit your question to our experts today! If you would like a thorough review of your personal financial situation, contact one of our nonprofit credit counseling agencies today!

*This article is intended to provide general information and should not be considered legal, tax, or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation