If you've missed credit card payments, even if it's been several months, don't panic. You would probably already know if your credit card company had filed a lawsuit. However, many credit card companies try to avoid the courts to cut costs. A few phone calls to your company and a payment arrangement might be all it takes to get back in good standing.
Receiving a Summons
If your credit card company decides to sue, you'll receive a summons, or a notice to appear in court, either by mail or by personal messenger. Once you receive the summons, you'll have about three weeks to respond, though the exact time depends on your state. Receiving a summons can be scary, especially if you've never been to court, but you shouldn't ignore it. If you do, the judge will issue a judgment against you, and you'll have to pay the entire amount the credit card company says you owe. If you ignore the problem long enough, the court could give your credit card company permission to take money from your paychecks or bank account.
Biding Your Time
If you haven't received a summons, you're probably not being sued, though you can call your jurisdiction's court clerk to be sure. In fact, you can usually miss payments for several months before your credit card company will take you to court. According to the Kiplinger financial website, credit card companies usually wait until your account is more than 90 days past due before pursuing the past due amount. Even at that point, credit card companies often elect to sell your debt to a debt collector instead of taking you to court. You'll know if your missed payments are getting close to the 90-day mark, because the credit card company will usually call, send letters or email you. If your account goes into collections, you'll know because the collections company will attempt to contact you.
If your account has been sent to collections, that doesn't mean you've avoided a lawsuit. If you don't respond to the collection company's attempts to contact you or refuse to pay your debt, the collections company could take you to court. To avoid being sued, contact the collections company right away. Most collections companies prefer to settle the debt outside of court to avoid legal fees. If you contact the company and tell the collector what you're able to pay, you may be able to avoid court and pay off your debt at a rate that you can afford and within a time frame that's realistic.
Avoiding a Lawsuit
If you've missed some credit card payments but you haven't received a summons from your credit card company, call customer service and ask to speak to a manager. You might be able to work out a payment arrangement that will keep you out of collections and court. Ask your credit card company to lower your rate, let you skip some payments or take a reduced amount as full payment. Dealing with lawyers and bill collectors can be costly and time consuming for your credit card company, so management might be willing to make a deal that's mutually acceptable.
Minors and Credit Card Debt
If you're under 18, it's not legal for you to have a credit card, but if you lied about your age to get one, you might not be responsible for what you charged. Minors aren't allowed to enter into contracts, and a credit card is a contract. If you're a minor or are being sued for money you charged as a minor, talk to a lawyer to plan the best legal defense for your suit. However, lying about your age to get a credit card is fraud, which is a crime, so you might face criminal penalties.
- FindLaw: What to Expect -- A Lawsuit Chronology
- Nolo: Defenses to Credit Card Debt Lawsuits
- ABC News: What to Do if You're Sued by Your Credit Card Company
- Kiplinger: What to Know About Credit-Card Debt Collection
- Bankrate: Debt, Collection Agencies and Your Rights
- Nolo: Credit Card Debt Lawsuits
- Care One: How to Negotiate Credit Card Debt
- Consumerist: Are Minors Responsible for Their Credit Card Debts?
- Consumer Financial Protection Bureau. "Requirements for Over-the-Limit Transactions." Accessed Jun 18, 2020.
- Experian. "What is a Credit Utilization Rate?" Accessed June 18, 2020.
- Experian. "What Is a Penalty APR?" Accessed June 18, 2020.
- Consumer Financial Protection Bureau. "Why Did My Credit Card Issuer Increase My Late Payment Fee?" Accessed June 18, 2020.
- Consumer Financial Protection Bureau. "Can My Credit Card Company Charge a Fee Based on How I Paid My Bill, Such as for Making a Payment Over the Phone?" Accessed June 18, 2020.
Miranda Morley is an educator, business consultant and owner of a copywriting/social-media management company. Her work has been featured in the "Boston Literary Magazine," "Subversify Magazine" and "American Builder's Quarterly." Morley has a B.A. in English, political science and international relations. She is completing her M.A. in rhetoric and composition from Purdue University Calumet.