Can a Credit Card Company Sue You

After a cardholder runs into a lot of debt, credit card companies can sue to recoup any past payments. Generally, credit card companies won’t pursue any charges if the debt is less than $1,000. So if you have a lot of payments still outstanding on your credit card, make sure to pay them off promptly or you run the risk of a lawsuit for amounts owed. 

Things to Look Out For

After a few missed payments occur, credit card companies will generally send mail to notify cardholders about it. They do this in hopes of reminding cardholders about any outstanding payments in case they forgot. These notices might also include the legal consequences of avoiding debt payments on credit cards

Once the credit card company raises a lawsuit against you, it is also important to check your mail for any notices from a court. If you avoid court summons or fail to make your payments after the court orders you to do so, you could face other penalties and consequences as well.

Courses of Action

Try to gradually pay off any debt: Generally, you can settle a dispute by simply paying off some of your debt and making a debt repayment schedule. By doing so, you can avoid legal fees and save time from fighting a court case.

Pursue legal counsel: Another method is to pursue a legal counsel to achieve the best possible outcome from a court case. A legal team can help advise cardholders to either declare bankruptcy or throw the case out entirely if the cardholders weren’t properly notified of the debt. Your mileage may vary with this approach, and it may not be worth hiring a legal team costing $800 if your debt is only $2,000. Similarly, cardholders fail to realize that they are also protected by the Fair Debt Collection Practices Act, which prohibits credit card companies from making threats. If you believe that a credit card company has infringed on your consumer rights, you can raise this up in a court case.

Debt Collection Methods

If you do end up losing the court case, it is also important to know the various ways in which credit card companies recoup debt. First, they can use something called wage garnishment which takes out a part of your paycheck to pay for a part of the debt. Another recoupment method is to repossess assets like housing or cars to help cover a portion of the debt, however this method isn’t as common. Lastly, the credit card company can take funds out of your bank account to cover the debt, if you have enough in your bank account.

Summary

In short, credit card companies can sue you for multiple missed payments to recover any debt owed. However, they generally won’t go after people with less than $1,000 in debt. If you do end up getting sued by a credit card company, there are many ways to solve the issue. In fact, most court cases end in a settlement that benefits both parties. It’s best to avoid this issue entirely, though, and try to make as many payments as you can on time.