Credit card debt arises from a legally binding contractual agreement between the cardholder and the credit card company. In the event the cardholder fails to make payments, the creditor could file suit against the debtor for breach of contract.
Considerations
In general, most credit card companies will file suit against a debtor only if attempts to reach a mutually satisfactory payment arrangement have failed or would prove futile.
Effects
In the absence of a legitimate defense to repayment, most credit card companies will usually prevail in their suit against a debtor for recovery of the default balance. In addition to the balance owed, a credit card company may also be awarded reasonable attorney's fees as well as its court costs.
Significance
Once a judgment is entered for a credit card company, the creditor may then seek to enforce the judgment against the cardholder by garnishing his wages, attaching his bank account or placing a lien on his real property.
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