In Texas, the petitioner, who is the credit card lender, files a lawsuit in court. You, the respondent, are served with legal notice of the lawsuit. Receiving a summons to appear in court for a debt you owe can cause anxiety. But, don't panic. The court gives you time to respond to the summons, and you have the right to seek advice or representation from an attorney. However, failing to appear in court means a default judgment will be issued against you.
Default Judgment
A court issues an automatic default judgment when a respondent fails to appear in court after receiving a summons. By not showing up in court, the court presumes that you owe the debt. This means that even if you had a valid reason for default, such as credit card fraud, the court will side with the credit card company. Third party companies that buy credit-card debt also can file suit in Texas for delinquent accounts.
Consequences
A default judgment generally grants the credit card lender the right to pursue further collection actions, such as wage garnishment and liens on nonexempt property. However, Texas does not allow wage garnishment unless for child support, federal taxes and student loans. However, non-wage income is subject to garnishment. For example, bank accounts, rents and royalties are subject to garnishment. Social Security income also is exempt.
Getting Help
If you receive a summons to appear in court for a credit card debt, do not ignore it. Failing to appear in court is the worst thing you can do. You have the option of hiring an attorney to help you defend your case. If you cannot afford one, opt for a public defense attorney to present your case. If were not properly served a summons, you have a valid and plausible defense. In such a case, you have grounds to have lawsuit thrown out, referred to as vacating the judgment. It is advisable to speak to an attorney regarding the circumstances surrounding your case. Legal aid for low-income individuals also may be available.
Negotiation
If you legitimately owe the credit card bill but have no way of paying the full amount, contact the credit card company to work out an out-of-court settlement. This saves you time and money, as most creditors add their court expenses to the balance of the debt. You avoid paying the credit card company's legal fees and possibly your own. In addition, the credit card company is more than willing to work with you to avoid going to court and recovering some of its money rather than accepting a total loss and further expense down the road.
Credit Impact
A default judgment becomes part of the public record. It shows up on your credit report as a negative item, which lowers your credit score. The effect on your credit score is difficult to quantify as it depends on what your score was before the default judgment. However, other lenders use the information they pull up on your credit report to make credit decisions. A default judgment remains on your credit report for seven years.
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