Can Payment Arrangements Be Made If I Am Sued for My Credit Card Balance?

When you accumulate a credit card balance, you must make at least the minimum payment to the credit card company to avoid further collection actions. In some cases, the credit card company will sue you to collect the balance that you owe. In this situation, you may still be able to set up a payment arrangement.

Civil Lawsuit

When you sign up for a credit card agreement, you sign terms that are set forth by the credit card company. Once you start using the card, the credit card company has the right to sue you in civil court to collect the balance of the card. Once the credit card company sues you, a judgment will be issued against you unless you can prove that you did not accumulate the debt. At that point, the creditor can use the judgment to collect.

After a Judgment

Once the credit card company obtains a judgment against you, it can use it in one of several ways. Although wage garnishment and property levies are an option, the credit card company may not use these tactics. At this point, you still have the option of setting up a payment plan with the creditor to repay the debt. The judgment is simply a legal order that forces you to pay the debt. Until the creditor takes it further and obtains a writ of execution, no other actions will be taken.

Settlement

If you have a judgment against you, it is typically in your best interest to set up a settlement with the credit card company. This may involve paying a specific amount of money each month until the debt is eliminated. It could also involve paying a lump sum and having the debt settled by the creditor. By working out a payment agreement or a settlement with the creditor, you avoid having money taken directly out of your paycheck.

Written Agreement

If you set up a payment arrangement with the credit card company, get it in writing. Before you send any money to the credit card company, you need a document that states the terms. Otherwise, the creditor could deny that an arrangement has been put in place and still pursue a wage garnishment order against you. Getting it in writing helps protect you and your finances.