How a Lawyer Can Help with Credit Card Debt Problems

Stephanie Cortes
According to Nerd Wallet, the average U.S. household carries over $15,000 in credit card debt. 

Some of this debt comes from large purchases people couldn't otherwise make. However, since the Coronavirus began spreading across the country, causing widespread unemployment, many Americans are using their credit cards to pay for rent, food and other essential items. 

Debt accumulation can wreck havoc on your credit score, financial health and mental health. 

Lawyers can help solve your credit card problems. 

What can happen if you do not pay your credit card debt?

If you don't pay your credit card balance in full every month, you are charged interest. It's essentially a fee for borrowing money you don't have in your checking account.

Interest makes it harder to pay back the money you borrowed.

Trouble starts when you can't pay the minimum amount due on your credit cards each month. At first, credit card companies will attempt to get in contact with you. Answer their calls. They may provide you with an extension to get a payment into them (However, they'll likely charge you late fees).

If you let calls and letters go unanswered,  the credit card company may decide to file a lawsuit against you.

Too often, debtors do nothing when a credit card company files a lawsuit. So the company wins by default.  According to PEW, debtors don't fight credit card companies in 70% of lawsuits. And that's a mistake, because the consequences are dire. 

What will happen if the credit card company wins?

If the credit card company wins, they will receive a judgment from the court ordering you to pay the debts. 

According to the National Consumer Law Center, more than 4.5 million workers had their paychecks garnished for consumer debts in 2019. Your employment wages and bank accounts may be seized to collect the amount owed. This may impact you financially as funds will be removed from your paycheck and you are unable to utilize your wages for necessities such as rent, food, medical cost, child care, etc.

Other consequences may include:
  • Court-enforced collection of funds taken from your bank accounts
  • Liens put on your property and assets
  • Ordering you to sell your vehicles or other assets to pay for the debt owed
  • Impact negatively on your credit score record
  • Create difficulty in obtaining opening up other lines of credits, mortgages, or getting an apartment.

How can a collection lawsuit defense lawyer help you?

But this outcome isn't guaranteed, especially if you get a lawyer to help you. When a debtor is served with court documents for a credit card lawsuit, they have the option to not respond or fight the case.

Fighting the case, with a lawyer's help, is almost always worth it. The Pew Research Center found that that less than 10 percent of defendants have lawyers in debt collection lawsuits. All of the credit card companies do have lawyers, however.

Studies have shown that when defendants with debt-related issues have legal help, they are more likely to win their case or reach a settlement with the credit card company. 

If you decide to respond to your case, a lawyer can help you with the following: 
  • Inform you of your rights and responsibilities of your debts including the time period you have to respond to court documents.
  • Raise defenses for you in court that negotiates the debt or dismisses the case.
  • If you are not the correct person who owes the debt and is being sued, attorneys can defend you and help you provide proof. 
  • Advise you about what you should and should not say to credit card collectors. 
  • Negotiate a settlement with credit companies and debt collectors.
Do I need to file bankruptcy if I'm sued for credit card debt?

You don't need to file bankruptcy just because a credit card company has filed a lawsuit against you. In fact, bankruptcy is exactly what an experienced lawyer can help you avoid.

But a lawyer can help you decide when it's in your best interest. 

With unemployment and financial impacts during the coronavirus pandemic, bankruptcy options may provide individuals with financial protection.

You may consider filing for a Chapter 7 bankruptcy that will discharge all debt and does not require you to repay. However if you earn more than the income limit, you may consider a filing a Chapter 13 bankruptcy.

According to Attorney Bowen, Klosinksi at LawChamp's Legal Meetup on May 8, 2020,  you may consider filing for a Chapter 13 bankruptcy if you feel that you will be unable to pay off your debts.

Reach out to us if a lawsuit has been filed against you, or you're worried a credit card company is getting close to doing so. 

This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not LawChamps.

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