The agreement between a credit card company and a cardholder is a legally binding contract. A debtor who fails to make payments in accordance with the terms and conditions of the card agreement could be sued for breach of contract.
Considerations
In order to avoid incurring court costs and attorney's fees, most credit card companies would prefer to enter into a mutually acceptable payment arrangement with a debtor rather than file a lawsuit to compel repayment.
Bankruptcy Stay
Once a debtor files for bankruptcy protection, the court places an automatic stay on all collection activity by creditors. The bankruptcy stay would preclude any creditor from filing a lawsuit against the debtor.
Statute of Limitations
A court may dismiss a lawsuit filed by a credit card company that is outside the applicable statute of limitations period established by the state in which the debtor resides. A creditor whose suit is dismissed for failure to comply with the statute of limitations has no further legal recourse against the debtor.
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