Served With A Credit Card Lawsuit? Review Your Options Quickly

White House Washington DC Bankruptcy Lawyers Convention 2011

I often have people from Houston Texas and surrounding counties come in to see me, clutching a lawsuit that they were served with by a constable or process server. They seem surprised, that they can be sued for a credit card debt. Yes, it does happen. And if you default on a number of credit cards, you could be served with several such lawsuits.

Once you are served or handed the lawsuit and summons or citation, you only have a limited number of days to answer or respond to the suit, or a default judgment may be taken against you.

You can ignore the suit if you want, and let a judgment be taken against you, but I don’t recommend it. With a judgment, a creditor can seize your bank account, and do other things like try to have a receiver appointed over you and/or your small business. If you try to ignore court orders, you could find yourself going to jail, not for not paying the debt, but for not obeying orders of a court. That being said, some people are “judgment-proof” meaning that they have no assets that can be seized under that state’s laws, and if the attorneys that are suing are not aggressive about collecting, they may never have to pay the judgment.  But it is still an extremely derogatory item on your credit report, so I don’t recommend just having an open judgment.

Of course you can fight the suit, particularly if the suit is brought by a “debt-buyer” or a company that buys

Another option is to go to a legitimate credit counseling service such as Money Management International, but under those programs you typically have to repay 100% of your debt, which most people that come to see me, just can’t do.  And once you are sued, forget about it, the plaintiff is not going to wait on one of those debt management plans to pay them.

Another option is to settle the debt, but I wouldn’t hire one of those debt settlement companies to help; many of them will just take your money and not do anything, or go bankrupt on you. Besides, once you are sued, they won’t help you.  But it may be possible to settle your credit card collection lawsuit, particularly if you hire an attorney. But you have to have money, and to settle them without them taking a judgment against you, you have to have a lump sum, which most of my prospective clients just don’t have. Besides, even if you can borrow the money to settle this one suit, if you have others come down the pike, what will you do then. You will have borrowed money from a friend or relative and then have to consider filing bankruptcy anyway.

Finally, bankruptcy may be an option for you. Either Chapter 7, which results in the complete cancellation or discharge of your dischargeable debts, or Chapter 13, where you pay part or all of the debt back over a period of time. In most cases, my clients report that they have a great deal of relief after the bankruptcy is over, and are glad they did it.

If you are a resident of the Houston Texas metropolitan area, including Harris County, Fort Bend County, Montgomery County, Galveston County or Brazoria County, I’m happy to meet with you to review your options at no charge. Please call my main number at 713-772-8037 to make an appointment, or you can make an appointment directly on my website at www.jthomasblack.com.