How To Defend Yourself In a Credit Card Debt Lawsuit

So you’ve been dodging creditor calls for years OR maybe you haven’t even heard from your creditor in years when a process server turns up on your doorstep with a civil summons.

Credit card companies routinely sell off old or bad debt. This means it is debt that they have written off their books and received a tax break for. You’ll commonly see this kind of debt as “charged off” on your credit report. That used to be the end of the story for “charged off” debt but times have changed and many corporations have gotten very wealthy by “purchasing” these old debts and turning around and suing the debtors in civil court.

It works like this. This “third party” company has purchased your debt for pennies on the dollar. They then turn it over to their team of lawyers who are either contracted out or employed by the collector. They perform some simple searches, figure out where you live, etc. and file a breach of contract lawsuit against you in your local court.

Once you receive their summons to court (which may or may not have a court date on it) you generally have 20 days to respond properly with what is called an “Answer.” This is also where you would assert defenses to their lawsuit and if you are being sued by one of these third-party collectors, there are many clever defenses that can be raised. The most effective of which is that the debt is time-barred if that is applicable to your situation.

Most people do not respond at all. They simply ignore the summons as they likely ignored the collector calls and hope it goes away. And it will, for awhile. What will happen is that default judgement will be entered against the debtor and this “third party collector” who spent pennies on your debt will be awarded the full sum plus interest, attorneys fees, etc. This is a fantastic investment for these companies.

Once the judgement is entered the collector has the right to contact your bank, employer, etc. and freeze your assets and/or garnish your wages until their judgement is satisfied. This type of thing often happens out of the blue without prior knowledge and can obviously put people in a very detrimental financial situation, especially with so many of us living paycheck to paycheck.

YOU MUST RESPOND. I know it’s intimidating, but if you have any care for your financial future it is in your very best interest to respond. At the best, you’ll get your lawsuit dropped and at the worst you can likely work out a favorable settlement agreement and save yourself all the interest and legal fees.

You need to start researching NOW and defend yourself. It can be done successfully.

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