If you default on your credit card debts, your creditors may act to get their money back. If phone calls and letters go unanswered, your creditors may sue. The purpose of a credit card lawsuit is to get a judgment against you so that your creditors can garnish your wages or take other serious action to collect their debts against you.
Default Judgment
If you do not attend your court hearing regarding your credit card debt, the court has no choice but to enter judgment against you in favor of the credit card company. Once it wins a default judgment, your credit card company can start garnishment proceedings or other action to collect the debt. If you go to court, the judge is obligated to allow you to present a defense before entering judgment against you.
30-Day Window
Once the creditor serves you notice that he is going to sue, you and your attorney have 30 days to prepare an answer. The answer is your defense. It often explains why you don't owe the debt or owe the entire debt that your creditor claims that you owe. You or your attorney can submit this answer to the court within the 30-day period, and the court then has to consider it before issuing a judgment.
Settling Out of Court
When you go to court, your attorney may ask your creditor's attorney to negotiate a settlement instead of proceeding with the court case against you. During negotiations, you and your attorney meet with the creditor and her attorney. Let your attorney speak for you during this meeting. Your attorney will attempt to get the creditor to drop the lawsuit in exchange for a partial payment of the balance you owe the creditor. If you and your creditor agree to the settlement, the creditor drops the lawsuit and you make the payment to settle the debt.
Judge's Decision
If you and your creditor do not settle out of court, the judge makes a decision after hearing the creditor's case and your answer. The judge may decide that your creditor is correct and enter a judgment against you or decide that you are correct and dismiss the case. The judge may also decide the creditor is partially correct and enter a judgment for part of the debt. Once a judgment is entered against you, the creditor can petition the court to garnish your wages or bank account.
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