Defensive Strategies in Court for Credit Card Debt Lawsuits

If you have unpaid credit card debt, you could be sued for the money. The more you owe, the greater the chances that a creditor might sue to get repaid. When you’re sued over credit card debt, the legal help you get and the way you respond could make a huge difference in the outcome. 

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

A summons from your credit card company probably won’t come out of the blue. Credit card companies typically first send repeated notices asking you to pay off your debt. A lawsuit is typically a last resort, since it costs them money.

If you receive a summons letting you know you’re being sued, don’t panic. Like any legal procedure, you have to work through it step by step. 

First, read it carefully and look for any inaccuracies in the complaint. You may, at this point, want to hire an attorney to represent you. Though you're not legally required to have an attorney represent you in a credit card debt lawsuit, having one on your side could lead to a more favorable outcome.

The summons you receive should have a deadline, and include instructions for your next steps. Make a careful note of these obligations, and discuss them with your attorney. Ignoring a lawsuit isn't a good strategy. Your creditor could get an automatic win if you don’t respond. 

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

If you can’t afford an attorney, research whether you’re eligible for help through your local Legal Aid Society office or volunteer lawyers in your area. Or check with your human resources department at work to find out if legal services are offered as part of an employee assistance program. 

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Possible defensive strategies for credit card lawsuits

The right approach to a credit card lawsuit will depend on your specific situation. An attorney can advise you of the best strategy for the circumstances of your case. Here are some potential defenses for an unpaid credit card debt lawsuit. 

Erroneous information

Credit card company records aren't always correct. And when credit card companies transfer debts to collection agencies, those debt collectors don’t always end up with the right information. A lawsuit could also be brought by a debt buyer, and their information may be inaccurate.

That’s why checking your records against the claims made in the legal complaint is so important. It’s a good idea to work with your lawyer to identify:

• Erroneous charges

• Duplicate charges

• Payments you’ve made that haven’t been reflected

• The date of delinquency and whether it’s correct

• Whether the correct interest rate and fees were applied to your balance

Fraudulent charges

If you find charges on your credit card statement that you don’t recognize, someone may have fraudulently used your account.

The Fair Credit Billing Act limits your liability if you’re the victim of fraud, but you’re responsible for notifying the credit card company within 60 days of the statement date. If you’ve already done this, you can work with an attorney to prove it.

It’s always a good idea to communicate with your credit card company in writing when disputing fraudulent charges. 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

Debt collectors have a time limit for suing you, known as a statute of limitations. This time limit varies from state to state. It’s typically between 3 and 6 years, but it’s sometimes longer.

An attorney should be familiar with your state’s statute of limitations. If the lawsuit wasn't begun within the time limit, your attorney could ask the judge to throw out the lawsuit entirely.

Lack of standing

Only certain people or companies can legally sue you. The right to sue over a particular matter is known as standing. 

A credit card company will often sell credit card debt to a debt collection firm. When that happens, the debt collector needs to prove they have bought your specific debt and have the right to sue you for it. Proving this may be more difficult than it seems. Lack of standing could get the lawsuit dismissed. 

Violations of debt collection rules

The Fair Debt Collection Practices Act is a federal law that limits the tactics debt collectors can use to recoup debts. Keep a record of any contact you receive from any debt collector, especially if you feel they are harassing you. It may be that they’ve used illegal tactics, and the collection calls can be stopped. 

For instance, debt collectors can’t call you after 9 PM or at work unless you agree to it. They can’t lie to you, threaten you, or use abusive language, either. An attorney can explain your rights in debt collection so you’ll know if someone has crossed the line.

Many states require debt collectors to be licensed. A debt lawsuit attorney can tell you if your state has this requirement, and if the debt collector suing you has the right license.

Debt settlement 

An attorney may be able to negotiate a settlement of your debt for less than the full amount you owe. Your creditor may decide that accepting a lesser amount is better than the time and expense of going through a trial. 

Debt settlement may be worth considering if you know you legitimately owe the money, and your attorney doesn’t think you have a strong legal defense against the lawsuit. An attorney should be able to advise you as to whether debt settlement makes sense. Some attorneys will negotiate on your behalf. You can also negotiate with creditors yourself, or work with a professional debt settlement company.

Bankruptcy

Bankruptcy is a legal process for dealing with debts. You may be eligible to have some or all of your debts discharged (forgiven) in bankruptcy. 

If you file for bankruptcy, one of the first things that happens is an automatic stay. That’s a legal order that stops most creditors from continuing debt collection actions against you, including lawsuits. An attorney can advise as to whether bankruptcy makes sense for your situation, and discuss the benefits and drawbacks. 

An attorney can also advise as to whether you qualify, and for what type of bankruptcy. To file for Chapter 7 bankruptcy, which is the kind of bankruptcy that lets you walk away from unsecured debts in a matter of months, your income must be below a certain limit that depends on where you live. 

Hang in there—you can do it!

Ultimately, the best way to defend yourself against a credit card debt lawsuit is to hire an attorney who can use whatever strategy they decide is most effective. And the strategy your lawyer chooses will depend on the specifics of your situation. 

One way you can help is to provide your attorney with as much information as possible. That could include records of communications with your credit card company, copies of old statements, and dispute records, if applicable. 

Hiring an attorney doesn’t guarantee that you’ll win a credit card debt lawsuit, but it may increase your odds of a better outcome.