Debt recovery procedures for credit card companies and collection agencies include telephone calls, collection letters and, occasionally, lawsuits. Your failure to pay your credit card balance could land you in court.
Time Frame
Although a creditor can file a lawsuit against you for your delinquent credit card debt, it must do so within the time frame specified by your state. Each state has a statute of limitations creditors must refer to when filing lawsuits. If your creditor files a credit card debt recovery lawsuit against you after the statute of limitations expires, you can have the lawsuit dismissed by the court.
Features
Just because your creditor has the ability to sue you doesn't mean that it will. Creditors are more likely to sue consumers who have steady employment and assets, and whose credit card debt exceeds $1,000. If a creditor sues you and you arrive in court to contest the lawsuit, the creditor must prove that you owe the debt.
Effects
Should a credit card company or collection agency sue you for your unpaid debt, it will automatically win the case by default unless you respond to the court summons and appear in court with a defense. When a creditor wins a debt collection lawsuit, most states award it the right to garnish wages and bank balances.
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