How to Stop a Credit Card Lawsuit

Failing to pay a credit card debt can result in a lawsuit, in which case your creditor takes you to court to recover funds. The judge in the lawsuit may award a credit judgment, which will appear on your credit report, and this negative item can remain on your report for up to seven years and lower your credit score. For this reason, it's important to take steps to stop a credit card lawsuit.

Instructions

1

Ask the bill collector to prove that you owe the debt. If the credit card debt has gone unpaid for a significant period, the card issuer may turn the debt over to a bill collector or collection agency, which will pursue you for payment. If you're unsure of the legitimacy of a credit card debt, contact the collector and ask it to supply written proof that you owe the debt. If the company cannot provide this information or verify that you owe the debt, it must stop collection attempts.

2

Negotiate with the creditor to determine whether you can pay off the debt and stop the lawsuit. Contact the creditor directly and explain your plans to pay the debt in full and prevent a lawsuit. Ask the creditor to accept monthly payment installments until you satisfy the debt, or, if you have the cash, offer to pay off the balance in a lump-sum payment. If the creditor accepts your offer and agrees to stop the lawsuit, obtain the agreement in writing.

3

File for bankruptcy protection to stop a credit card lawsuit. Bankruptcy should be pursued only as a last resort because of its damaging effect on your credit rating. However, if you are financially distressed, you can file for bankruptcy protection to stop the lawsuit and stop creditor telephone calls. Filing bankruptcy can halt or stop any lawsuit a creditor files to pursue debt collection. Debts are either dissolved in the bankruptcy or repaid with a court-approved payment plan.