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Options when facing a lawsuit for credit card debt

If you have reached a point where you are not able to pay your monthly credit card bill, you may have done what many California consumers do: ignore it. You may have stopped opening the envelopes that come in the mail to warn you of the consequences for delinquency or answering the calls demanding payment. Now you are in even more of a bind because the credit card company has filed a lawsuit against you.

Ignoring demands for payment may be one of the worst decisions you can make when you are behind on a bill. Often, creditors are willing to negotiate because they would rather have some of what you owe them than none at all. If you find it difficult to communicate with a credit card company, you can enlist the assistance of an attorney who has experience dealing with creditors and may be able to work out an acceptable resolution.

Your next step

However, if you are already facing legal action, it is not too late to seek the help of an attorney. With skillful negotiating, you may be able to stop the lawsuit and settle with your creditor for a mutually agreeable amount.

Once you receive a notice that the credit card company intends to sue you for payment, you have a limited amount of time to respond. This is one warning you may not ignore. Doing so may result in an automatic judgement against you, leading to the garnishment of your wages or checking account. Planning a defense is critical and may require some investigation, for example:

  • Has the statute of limitations expired for the collection of your debt?
  • Has the credit card company failed to produce all the necessary documents related to your account?
  • Has the lawsuit mistakenly occurred due to robo-signed debt collection without a human to review the case?
  • Has the credit card company failed to apply all the payments you made on the debt?
  • Are you actually liable for the debt, or are you merely an authorized user of the credit card?

Even if your defense is unsuccessful, you have options, including another attempt at negotiating a lower payment or filing for bankruptcy to stop all collection efforts. Each of the options carries its own advantages and drawbacks, so it would be in your best interests to seek legal advice before moving in any direction.

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