If you find yourself on the receiving end of a lawsuit, any number of emotions may surface. Shock. Fear. Panic. Distress. Anger. Numbness. Hopelessness. Maybe some combination of all these. Whatever you may feel, the one question you are almost certainly asking as you hold that accusatory piece of paper in your hand is this: What do I do now?
Original Creditors and Third-Party Debt buyers rely on defendants doing nothing. Very often, these creditors do not have the documentation necessary to win their case or even show that they have the right to sue you to begin with. They count on you to ignore their claims or agree to whatever terms they push for. If debt collectors have sued you, a credit card debt lawyer can reduce your liability by thousands of dollars.
About 70% of lawsuits end in a default judgment against the borrowers because they do not respond to the lawsuit. Not responding makes it much more difficult to challenge the creditors.
According to a recent report from the LendingTree.com, the credit card balance in the second quarter of 2023 totaled $1.031 trillion, the highest amounts of debt since the New York Fed started tracking consumer debt in 1999. Pennsylvania consumers have an average credit card debt of $6,620 at the end of 2022.
Bill's client-centric approach emphasizes the fact that behind every client's file is a human being who may be living through a challenging time. Our office handles many types of cases throughout Pennsylvania, obtaining millions for our clients in debt reduction.
You may be sued by credit card companies for outstanding balances, or if the debt has been sold, you may be sued by third-party debt collectors.
Pennsylvania law requires that original creditors prove their claims by offering thorough documentation proving the exact terms of the agreement between you and them, any changes in those terms, when the account existed, and how they calculated the exact amount they're claiming you owe. If a third-party debt buyer sues you, they must prove everything an original creditor does and prove that they have the legal right to sue you. Often they lack this documentation and cannot make their case.
No one wants to be sued for credit card debt, but it happens more than you think. The likelihood of being sued for credit card debt depends on a few factors, including your financial situation, the creditor's policies, and the local debt collection laws. Creditors typically follow a series of steps before resorting to legal action to recover outstanding debts, such as:
Late Payments. Initially, if you miss a payment or make a late payment, the creditor may charge late fees and interest, but they may not immediately pursue legal action.
Debt Collection Efforts. After a certain period of delinquency, creditors may engage in debt collection efforts, which could involve contacting you through letters, phone calls, or third-party collection agencies. These efforts are meant to encourage repayment.
Charge-Off. If you continue to miss payments, the creditor may eventually "charge off" the debt. This doesn't mean you're off the hook, but it indicates that the creditor considers the debt unlikely to be repaid.
Legal Action. Creditors or debt buyers (companies that purchase delinquent debts) may decide to take legal action to recover the debt. This could involve filing a lawsuit against you in court.
The likelihood of being sued for credit card debt increases if you have a significant outstanding balance, multiple missed payments, or if the creditor believes that pursuing legal action is a viable option. However, many creditors prefer negotiating repayment plans or settling the debt outside of court to avoid costs and other uncertainties.
If you’re having difficulty repaying your credit card debt, you should reach out to your creditors, explore debt relief options, and consider seeking advice from a financial counselor or a reputable Credit Card Debt Lawyer. It's important to be proactive in addressing your financial challenges to minimize the risk of legal action.
A Plaintiff doesn’t have to prove their entire case when they file a lawsuit, but the Pennsylvania Rules of Civil Procedure and Pennsylvania case law have set forth certain requirements that a creditor must meet before a Complaint is considered valid enough to move forward. However, enforcement of these rules is not automatic.
A Defendant must assert – and prove – that a creditor’s Complaint is defective. Because creditors never anticipate a Defendant responding, they are vulnerable when they do. Creditors’ Complaints are almost always skeletal, threadbare documents, containing maybe a single monthly statement and maybe a boilerplate cardmember agreement that they pulled from the company servers. Or not. I’ve seen Complaints that had not a single syllable of supporting documentation.
Pennsylvania law frowns on this, and the Courts will often dismiss bad Complaints and require the Plaintiff to rewrite the Complaint (called an “Amended Complaint”) that is in compliance with the law. If they can’t – or won’t – the Defendant can go on offense.
If you have been sued by debt collectors, whether a Third-Party Debt Buyer or an Original Creditor, please call me. I don’t charge a fee for initial consultations. The worst thing you can do right now is nothing. That’s what they want. You have defenses, and it’s time to use them. Read our article on What To Do If You Are Sued By A Credit Card Company.
Unfortunately, it’s possible to go to court for credit card debt. If you have outstanding credit card debt and the creditor or debt collector decides to pursue legal action to recover the debt, they may file a lawsuit against you in court. This process can lead to a court judgment against you for the owed amount, plus any additional fees, interest, and legal costs.
Here's an overview of how the process may unfold:
Lawsuit Filing. The creditor or debt collector will file a lawsuit against you in the appropriate court. They will typically serve you with a legal summons and complaint, informing you of the lawsuit and the debt they seek to recover.
Response. Once you receive the summons and complaint, you have a limited amount of time (often around 20-30 days, depending on local laws) to respond. You can respond by admitting to the debt, denying it, or requesting additional information.
Court Proceedings. If you deny the debt or contest the lawsuit, the case may proceed to a court hearing. Both parties will present their arguments, evidence, and witnesses, if applicable.
Judgment. If the court rules in favor of the creditor or debt collector, a judgment may be entered against you. This judgment confirms the amount you owe, including any legal fees and interest. Depending on local laws, The creditor may have the legal right to pursue various collection methods to recover the debt, such as wage garnishment, bank account seizure, or property liens.
It's important to note that laws and procedures can vary depending on your situation. If you are facing a lawsuit for credit card debt, it's crucial that you seek legal advice from a Credit Card Debt Lawyer. They can help you understand your rights, potential defenses, and options for resolving the debt, including negotiating a settlement or repayment plan outside of court.
Most of the time, you cannot be arrested solely for credit card debt in the United States. Debtors' prisons were abolished in the U.S. a long time ago, and being in debt itself is not a criminal offense. However, there are some situations where legal action related to debt could potentially lead to your arrest:
Failure to Comply with Court Orders. If a court has issued an order related to your debt, such as a subpoena to appear in court or an order to provide financial information, failure to comply with these court orders could result in a warrant for your arrest for contempt of court.
Debt-Related Fraud or Criminal Activity. Engaging in fraudulent activities related to credit card debt, such as identity theft or credit card fraud, can lead to criminal charges and potential arrest.
Violation of Specific Laws. Some states have specific laws related to debt, and in rare cases, failure to comply with these laws could result in legal consequences, including arrest.
Fortunately, the typical process for addressing credit card debt involves civil actions, such as lawsuits and judgments, rather than criminal charges. If you are struggling with credit card debt, it’s essential to communicate with your creditors, seek financial counseling, and explore options for debt relief or repayment plans. If you have concerns about your legal rights or potential consequences, speak with a Credit Card Debt Lawyer for free today.
For Original Creditors, the approach is a little different, but a Defendant still has robust and effective defenses against an Original Creditor lawsuit. Specifically, while an Original Creditor may be able to show they have the legal right to initiate the lawsuit (though with banks frequently purchasing each other, this is not a given), they still must show another basic fact: That you owe the exact amount they’re claiming you owe.
How do they do this? Again, documentation. Do they have it? Again, probably not, at least not in the initial Complaint they filed. Remember that creditors’ law firms, whether representing Third-Party Debt Buyers or Original Creditors, operate on the “Default Judgment” business model.
Chances are good that the Plaintiff suing you isn’t anyone with whom you’ve ever done business. Instead, they are likely to be Third-Party Debt Buyers. These companies purchase debt accounts from original creditors, often in bulk (meaning hundreds or thousands of files in one transaction), typically for pennies on the dollar. They then turn around and attempt to collect the full amount of the account, bringing hundreds of lawsuits in the process. It’s simple math: Purchase a debt for $5.00, collect $1,000.00, and you’re up $995.00!
Here’s the thing: The simple fact is that a Plaintiff bears the burden of proof in establishing each element of their claim against a Defendant. Among the most rudimentary elements of any claim being made is that the plaintiff has the legal right to do so. So a Plaintiff must either show that you owe them money directly or that they purchased your account – and thus, the right to sue – from that company.
Why does this matter? Because Third-Party Debt Buyers often do not have the documentation necessary to show they have the right to sue you. So, right at the outset, a Defendant can deal an often-fatal blow to the Plaintiff’s claims, provided the Defendant’s attorney knows how to deliver it. That is where I come in.
A credit card debt lawsuit’s complexity can vary based on several factors, including the case's specific circumstances, the laws of your jurisdiction, and the actions taken by both parties involved. This includes:
Amount of Debt. The complexity often depends on the amount of debt in question. Smaller debts might be handled more informally or might not even reach the lawsuit. More significant debts might involve more extensive legal proceedings.
Defenses and Disputes. If you believe the debt is invalid, have a defense, or dispute the amount being claimed, the case could become more complex. This might involve gathering evidence, presenting legal arguments, and potentially going through a trial.
Legal Procedures. Credit card debt lawsuits typically involve legal procedures, such as filing court documents, responding to motions, attending hearings, and potentially going through a trial. Navigating these procedures can be complex, especially if you're unfamiliar with legal processes.
Jurisdictional Differences. Laws and procedures can vary by jurisdiction. Understanding and adhering to your area's specific rules and requirements can add to the complexity.
Representation. Having legal representation can influence the complexity of the lawsuit. If you're represented by an attorney, they can handle legal complexities on your behalf. If you represent yourself (pro se), you must manage all aspects of the case independently.
Negotiations and Settlements. Sometimes, lawsuits can be resolved through negotiations or settlements outside court. The complexity of negotiations can depend on the willingness of both parties to find a resolution.
Duration. The length of the lawsuit can also impact its complexity. If the case drags on due to various factors, it can become more intricate and challenging to manage.
It's important to note that while some credit card debt lawsuits can be relatively straightforward, others can indeed become quite complex, especially if legal disputes arise, evidence is contested, or other complications emerge. Suppose you are faced with a credit card lawsuit. In that case, seeking legal advice from a Credit Card Debt Lawyer experienced in debt and consumer protection can help you understand the specific complexities of your case and navigate the legal process effectively.
If you’re struggling with credit card debt or sued for debt collection, you’re not alone and don’t need to face your credit card company or third-party debt collector on your own. At our practice, we know that there’s a human being behind every credit card debt case, and we will get through it together.
Contact the experienced Credit Card Debt Lawyers at the Law Offices of William P. Harrington, Jr. for a free, no-obligation consultation by submitting a form below or calling our office at 484-459-5075.