A judgment in a credit card case cannot be granted until a lawsuit is reviewed in court. In theory, a credit card company could sue you and win a judgment for any amount -- even a few dollars. However, from a business standpoint it isn't practical for card companies to sue for small amounts as it could incur several hundred dollars in expenses pursuing you in court. The card companies make individual decisions regarding when to sue, and there is no published standard.
Payment Arrangements
Ignoring a delinquent credit card debt and hoping you won't be sued is risky. It's better to put the debt behind you by making payment arrangements. The Smart Money website reports that delinquent credit card debts can often be settled for between 20 and 75 percent of the balance. That's obviously better than being sued in court and ordered to pay the entire amount. Debt settlement is a common form of debt management, allowing you to resolve a debt by paying less than the full balance. Call your credit card company at its customer service number to request a settlement.
Ignoring Debt Collectors
Read all correspondence from your credit card company or debt collector. People unable to pay or settle their debts often ignore mail from debt collectors. That could be a mistake. The debt collector could be writing to offer a reasonable settlement with payments in installments. Or it could be a notice suggesting that the credit card company is considering a lawsuit. The letter could be a bluff to entice you to pay -- or it could be the start of a legal action.
Legal Notices
Court notices should never be ignored. "The New York Times" reports that some people fail to realize that they have been sued until they discover their bank accounts have been frozen because of a judgment. To protect your rights, you must respond to any notices sent to you by a civil court. Credit card lawsuits begin with the notification of a lawsuit, called a summons. Attached to the lawsuit is a document called a complaint, which is the actual lawsuit. The summons and complaint are usually delivered to you by a courier, who can contact you at your home, office or anywhere else. Carefully read the summons if you receive one and seek advice from an attorney on how to proceed.
Negotiation Is Always Possible
You may still have an opportunity to settle, even after being sued. Settling, even for the full amount with installments, is better than receiving a judgment. The judgment will remain on your credit report for seven years and, more important, allow the debt collector to possibly garnish your wages and bank account.
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