What to Do If You Are Sued by a Credit Card Company

Receiving notice that you are being sued by a credit card company can be a stressful and overwhelming experience. It’s essential to understand that you have rights and options in such a situation. Being proactive and taking appropriate steps can help you navigate the legal process and protect your interests. Here’s what you should do if you are sued by a credit card company.

1. Stay Calm and Review the Lawsuit: Receiving a lawsuit can trigger a range of emotions, but it’s crucial to stay calm and not ignore the situation. Ignoring the lawsuit won’t make it go away and may result in a default judgment against you. Carefully review the lawsuit documents, which typically include a Petition and Citation. The complaint outlines the credit card company’s claims against you, and the summons provides instructions on how to respond within a specific timeframe, usually 14 to 20 days. Make sure to note the deadline to respond.

2. Seek Legal Advice: It’s advisable to seek legal advice from a qualified local Houston attorney who specializes in debt collection and credit card lawsuits. An attorney can provide you with expert guidance on how to proceed and help you understand your legal rights and options. They can review the lawsuit documents, assess the strength of the credit card company’s claims, and provide you with advice on how to respond effectively.

3. Respond to the Lawsuit: Failing to respond to a lawsuit can result in a default judgment against you, which means the credit card company automatically wins the case. It’s crucial to respond to the lawsuit within the specified timeframe, typically 14 to 20 days, to protect your rights. Your response will depend on the laws and rules of your jurisdiction, but generally, you can respond by filing an answer or a motion to dismiss. An answer is a formal response that addresses each claim made by the credit card company, while a motion to dismiss seeks to have the lawsuit dismissed for various legal reasons.

4. Challenge the Credit Card Company’s Claims: It’s important to challenge the credit card company’s claims if you believe they are inaccurate or unjustified. Credit card lawsuits are often based on debt collection, and there are cases where the credit card company may not have proper documentation or evidence to support their claims. For example, they may not have the original signed credit card agreement, or the statute of limitations may have expired. Your attorney can help you review the credit card company’s claims and identify any weaknesses or inconsistencies that can be challenged in court.

5. Consider Negotiating a Settlement: If you do not have a strong defense against the credit card company’s claims or if the lawsuit is causing significant financial stress, you may consider negotiating a settlement. A settlement is an agreement between you and the credit card company to resolve the lawsuit without going to trial. It typically involves paying a reduced amount in exchange for the credit card company dropping the lawsuit. It’s essential to carefully review the terms of the settlement and make sure you can afford to pay the agreed-upon amount before accepting a settlement offer. Consulting with an attorney can help you negotiate favorable settlement terms and protect your interests.

6. Attend Court Hearings: If the lawsuit proceeds to court, it’s crucial to attend all court hearings as required. Failing to appear in court can result in a default judgment against you. Make sure to bring all relevant documents and evidence to support your defense if you have one. Your attorney can represent you in court and present your case effectively.

7. Be Mindful of Your Finances: Being sued by a credit card company can have financial implications, and it’s crucial to be mindful of your finances during this process. Make sure to carefully review your financial situation, including your income, expenses, and debts. Consider creating a budget and cutting unnecessary expenses to ensure that you can meet your financial obligations, including any potential settlement or judgment amount. It’s also advisable to avoid taking on new debts or making major financial decisions during this time, as it may impact your ability to resolve the lawsuit.

8. Keep Records and Communication in Writing: When dealing with a credit card lawsuit, it’s important to keep detailed records of all communication and documentation related to the case. This includes copies of all letters, emails, and documents exchanged between you and the credit card company, as well as any court filings and orders. Keeping records in writing can provide evidence of any agreements or disputes that may arise during the lawsuit and can be helpful in protecting your rights and interests.

9. Respond to Discovery Requests: During the lawsuit process, both parties may engage in the process of discovery, which involves exchanging information and evidence related to the case. The credit card company may send you requests for information or documents, and it’s important to respond to these requests within the specified timeframe. Failing to respond to discovery requests can result in sanctions from the court, which can negatively impact your case. Your attorney can help you respond to discovery requests effectively and in compliance with the court’s rules.

10. Consider Alternative Dispute Resolution: In some cases, credit card lawsuits can be resolved through alternative dispute resolution methods such as mediation or arbitration. These methods involve a neutral third party helping to facilitate a resolution between you and the credit card company. Alternative dispute resolution can be less formal and less costly than going to trial, and it can provide an opportunity for a mutually acceptable resolution. Your attorney can advise you on whether alternative dispute resolution may be a viable option in your case.

11. Be Prepared for the Outcome: Credit card lawsuits can have different outcomes, including a judgment in favor of the credit card company or a dismissal of the case. It’s essential to be mentally prepared for the potential outcomes and have a plan in place to address them. If the lawsuit results in a judgment against you, it’s crucial to understand your obligations and options for satisfying the judgment, which may include payment plans or negotiating a resolution. If the lawsuit is dismissed, it’s important to keep copies of all relevant court documents for your records and to ensure that the credit card company has dismissed the case in its entirety.

12. Take Steps to Protect Your Credit: A credit card lawsuit can negatively impact your credit score and financial standing. It’s important to take steps to protect your credit during and after the lawsuit process. This includes staying current on any other debts you may have, making timely payments, and avoiding additional delinquencies. It’s also important to review your credit reports regularly to ensure that they are accurate and to address any discrepancies or errors that may arise from the lawsuit.

In conclusion, being sued by a credit card company can be a challenging and overwhelming experience, but it’s important to remember that you have rights and options. Taking proactive steps, such as seeking legal advice from a local bankruptcy attorney, responding to the lawsuit, challenging the credit card company’s claims, and considering alternative dispute resolution or settlement, can help you navigate the legal process effectively and protect your interests. It’s also important to be mindful of your finances, keep records in writing, and be prepared for the potential outcomes. By taking these steps, you can better manage the situation and work towards resolving the lawsuit in the most favorable way possible.