How to Not Get Sued by Creditors

Missing one or two payments may not prompt a lawsuit by a creditor. But if you continue to miss payments, your creditor can file a suit against you to collect funds, late fees and additional interest. Rather than allow a creditor issue to spiral out of control, learn how to avoid being sued by your creditor.

Instructions

1

Stop ignoring creditors' attempts to communicate with you. Creditors often send letters or telephone your home before filing a lawsuit against you. Talk to your creditors and explain your situation to help prevent lawsuits. Knowing your situation may convince them to offer help.

2

Consider different debt consolidation options. Tap into your home's equity or borrow against a life insurance policy to acquire cash to pay off creditors and avoid a potential lawsuit.

3

Start paying the minimum to keep creditors satisfied. Even if you can't get rid of the debt entirely, at least make the minimum payment each month to keep creditors at bay and avoid a lawsuit. If you can't afford the minimum, talk to creditors to determine whether they can offer a reduction.

4

Modify your credit card terms and payments. Numerous creditors offer modification to help borrowers keep their accounts in good standing. Modifications can include altering payment dates, decreasing the minimum or lowering the rate on accounts to bring down payments. Some creditors offer the option to skip a payment to help borrowers undergoing hardship. Try to negotiate a settlement, in which the creditor agrees to accept less than the total amount you owe as payment in full. Creditors are not obligated to agree to a settlement, but some will do so to avoid the cost of a lawsuit.