Bankruptcy Is Not Always The Cure For Credit Card Debt
The leading cause for bankruptcy in the U.S. is credit card debt. Yet filing for bankruptcy to resolve this debt is not always the best option. However, there is certainly one practice that every citizen should avoid, and that’s ignoring a court summons for a default judgement. In fact, credit card companies are relying on you doing just that, ignoring the summons. Why? When lodging lawsuit documents, credit card companies generally only provide the barest minimum required in that state, often not even proving that you actually owe any money.
If you are issued with a summons to answer a credit card lawsuit, your first step should be to consult a lawyer. However, if that lawyer suggests submitting a repayment plan, either tell them no, or find another lawyer. That may sound blunt, but you need to be. You need to find a lawyer that will make the credit card prove the debt, prove that you owe them money, and that the interest being charged is lawful. You will be surprised at how many credit card contracts are actually invalid.
One example is where a credit card company has sold the debt on to a debt collection agency. Often, the sale is not done correctly and legally, you owe the debt collection agency nothing at all. You may still owe the original credit card company, but their right to claim interest may have terminated when they ‘sold’ the debt. Other examples of where problems may arise include credit card companies that have changed name, often after a merger or buy-out by a larger enterprise.
If you turn the tables on whomever is instigating the lawsuit for credit card debt, you may suddenly find they are more than willing to negotiate a suitable repayment plan, so avoiding a judgement. Your credit score may not take a hit, especially if you lawyer can include the removal of bad reports from your credit report as part of the agreement. Credit card companies rely on you not fighting their action – the sad fact is, 90% of credit card lawsuits end in a default judgement – don’t let that be you.
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