United States Credit Card Lawsuit Attorneys
U.S. Bankruptcy Lawyers Helping Debtors Defend Against Legal Action by Creditors
Most people have some credit card debts, as well as other financial obligations like home mortgages, auto loans, student loans, and ongoing living expenses. When debts accumulate and become unmanageable, payments to credit card companies may be neglected in favor of other expenses. However, when these debts go unpaid, credit card companies will do everything they can to recover the money owed, and in some cases, they may file a lawsuit against a debtor. In these situations, debtors should be sure to understand what these types of lawsuits will entail, as well as their options for defense, including the possibility of filing for bankruptcy.
Defending Against Credit Card Lawsuits
If a credit card company initiates a lawsuit against a debtor, the debtor will be served with a complaint and summons. These should not be ignored, since if a debtor fails to file a response to the complaint, the court may make a default judgment in favor of the creditor. This will allow the creditor to take action to collect the money owed, such as garnishing the debtor's wages or placing a lien on their property.
There are a variety of potential defenses against a credit card lawsuit. However, it is important to understand that a lawsuit will seek to establish that the debtor has a legal obligation to repay debts to the creditor, and an inability to make payments is not a valid defense. Instead, debtors may defend against a lawsuit by disputing the creditor's right to seek repayment. They may do so by showing that the statute of limitations for seeking repayment has passed, that the creditor cannot prove that they own the debt, or that the debts exist because of identity theft or other fraudulent credit card charges. Other defenses may include showing that the creditor did not follow the proper procedures when serving the summons and complaint to the debtor or showing that the debt has already been repaid.
Debtors may also address credit card lawsuits by filing for bankruptcy. After a bankruptcy petition is filed, an automatic stay will take place, and creditors will be required to cease all collection actions. This will not only prevent creditor harassment, but it will also halt legal proceedings such as lawsuits, as well as wage garnishment or other methods of collecting payment following a judgment. If a debtor qualifies for Chapter 7 bankruptcy, they will be able to discharge their unsecured debts, including credit card balances. If the debtor does not pass the means test, or if they have secured debts such as a home mortgage, they may use Chapter 13 bankruptcy to consolidate and repay their debts through a three-to-five-year repayment plan.
Contact a United States Bankruptcy Attorney for Creditor Lawsuits
Debtors who are facing lawsuits from credit card companies or other creditors will want to work with an experienced bankruptcy lawyer to determine their best options. A qualified attorney can help debtors understand whether creditors have legitimate claims or whether the debtor can provide evidence to show that they should not be required to repay debts. A lawyer can also help negotiate a settlement with creditors that will allow debtors to repay debts affordably, and they can help debtors understand whether they can discharge or consolidate debts through bankruptcy. During the bankruptcy process, an attorney can ensure that debtors follow all of the necessary steps and meet all legal requirements, allowing them to receive a fresh start and maintain ongoing financial security going forward.
