Defensive Strategies in Court for Credit Card Debt Lawsuits

If you have unpaid credit card debt, you might be sued for the money. This generally doesn’t happen for small amounts, but the more you owe, the greater the chances are that a creditor might sue to get what they’re owed.

Being sued is serious, and you’ll need to take action. It’s scary, but try to stay calm. Others have survived getting sued, and you can, too. How you respond could make a huge difference in the outcome. 

What to do if you’re sued for unpaid credit card debt

Getting a summons from your credit card company is frightening. It’s supposed to be—intimidation is one way creditors try to get money out of people. But don’t panic. It’s a legal procedure, and like any matter you just have to work through it step by step.

When you’re sued, you’ll receive a written summons. The first step is to read it carefully. Look for any inaccuracies in the complaint. 

The summons should also have a deadline and give instructions for your next steps. Make a careful note of these obligations. Ignoring a lawsuit is not a good strategy because the person suing you could get an automatic win if you don’t respond.

Next, review the history of the account in question. Collect any paperwork you can find, including the account agreement and statements. Compare the amounts the credit card company claims you owe with your own records.

With this background in mind, you have to decide how to respond to the lawsuit. You should consider getting legal representation. If you can’t afford an attorney, search for a Legal Aid Society or volunteer lawyers in your area or check with your human resources department to find out if legal services are offered as part of an employee assistance program. The law is complicated, and people who aren’t lawyers are often at a disadvantage. 

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Possible defensive strategies for credit card lawsuits

The right approach to a credit card lawsuit will depend on your situation. 

Here are some common ways of defending against a lawsuit for unpaid credit card debt:

Dispute errors

Credit card company records aren’t not always correct. Also, the lawsuit may be brought by a separate collection company that purchased the debt. As a result, they may not be fully up to date with account details.

That’s why checking your records against the claims made in the legal complaint is so important. The following details could help you prepare:

• Erroneous charges

• Duplicate charges

• Payments that haven’t been fully reflected

• The date of delinquency

• Any details that show who owns the debt (if you think it was someone other than you_

• The state where you’re being sued (it has to be where you got the account or where you live)

• Whether the correct interest rate and fees were applied

Look for fraudulent charges

If you find charges on your statement that you don’t recognize, it may be because someone fraudulently used your account.

The Fair Credit Billing Act limits your liability if you’re the victim of fraud. The catch is, you’re responsible for notifying the credit card company within 60 days of the statement date. If you’ve already done this, you’ll need to prove it.

It’s always a good idea to communicate with your credit card company in writing. If you use email, print or screen-capture every message. If you use postal mail, keep copies and get proof of delivery.  

Statute of limitations

The statute of limitations is the debt collector’s time limit for suing you. This time limit varies from state to state, but it’s typically between three and seven years.

Check to see your state’s statute of limitations . If the lawsuit was not initiated inside that time, you may be able to ask the judge to dismiss the suit entirely.

The time limit starts the day of delinquency (typically six months after your payment due date) or the date you made your most recent payment. It’s ironic, but making a payment could actually lengthen the time a creditor has to sue you.

Lack of standing

Lack of standing is a technical way of getting a lawsuit dismissed. 

Only certain parties have a sufficient legal stake in a case to bring a lawsuit. The right to sue over a particular matter is known as standing. 

A credit card company will often sell credit card debt to a collections firm. When that happens, the collections firm will need to prove they have bought your specific debt in order to have the right to bring a suit. 

Providing this might be more difficult than it seems. So it’s worth requiring the party suing you to prove they have standing. 

Violations of debt collection rules

The Fair Debt Collection Practices Act is a federal law that limits the tactics debt collectors can use. Keep a record of contacts you receive from any debt collector, especially if you feel they are harassing you. Perhaps they’ve used illegal tactics. For instance, they can’t call you after 9PM or at work unless you agree to it. They can’t lie to you, or threaten actions they’re not actually planning to take. Get familiar with your rights in debt collection so you’ll know when someone is crossing the line.

Many states require debt collectors to be licensed. Check if your state has this requirement and if the debt collector suing you has the right license.

Debt settlement offer

You may be able to negotiate a settlement of the debt for less than the full amount. The plaintiff may decide that accepting this is better than the time and expense of going through a trial. 

This might be worth considering if you owe the money and don’t see a strong legal defense against the lawsuit.

Bankruptcy

Bankruptcy—a legal process for dealing with unsecured debts—may be worth considering if your debt is large, or you have multiple creditors, or you need legal help stopping a foreclosure. You might find it easier than dealing with these creditors one by one.

Hang in there - You can do it!

The right strategy for unpaid credit card debt depends on your situation, and more than one of these might apply to your situation. Legal advice could help you make the right choices.

Getting sued means you’ll have to make tough decisions. Remember that making those decisions can be the first step toward putting the lawsuit behind you and getting on with your life. Deciding on those moves might feel good, once you make them.