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Catching up on credit card payments can be impossible once you are behind. The past-due payments seem to snowball. The credit card company will send notices, call repeatedly, and threaten legal action. They may sell or transfer the debt to a debt collector. Eventually, the company may file a debt collection lawsuit. Our Massachusetts bankruptcy lawyers discuss the steps involved in legal action to help you understand credit card debt lawsuits.
The Steps in Credit Card Debt Lawsuits
If you owe unpaid debt on a credit card, the company may file a collection lawsuit to collect the debt. The steps in a collection lawsuit generally include the following:
Filing of Summons and Complaint
The credit card company files the initial pleadings with the court. Generally, they are filed in the county where you reside. The complaint alleges the facts of the case and the legal basis for the debt.
Service of Summons and Complaint
You will receive a copy of the summons and complaint filed with the court. There are several ways to serve someone with legal pleadings. Typically, a sheriff, deputy sheriff, or process server personally delivers the papers to you.
Responsive Pleadings
If you intend to hire an attorney, do so immediately.
Read the entire summons and complaint. You have 20 days to prepare and file an answer, which has to be served by the plaintiff’s attorney. The answer responds to each of the allegations in the complaint. You can admit the allegations are true, deny the allegations, or state that you do not have sufficient information to respond.
You may include a counterclaim alleging that the credit card company failed to do something or engaged in illegal acts. Remember, you need evidence to support your claims.
If you file an answer, the case moves to the discovery phase. However, the credit card company can ask for a default judgment if you do not file an answer. A default judgment is an order against you for the amount the credit card alleges you owe.
Discovery
The discovery phase of a lawsuit allows the parties to exchange information and documents. The parties gather additional evidence to support their allegations and have the chance to view the evidence the other party intends to present.
Pre-Trial Motions
Either party may file pre-trial motions. The plaintiff usually files a Motion for Summary Judgment. The motion asks the court to issue an order in favor of the company based on the pleadings. You may file a Motion to Dismiss, asking the court to dismiss the case because there is insufficient evidence to prove the company’s claim.
Trial and Judgment
The case is scheduled for a trial. The credit card company presents its case first, followed by you. Parties can call witnesses to testify and present documents as evidence. If there is not a jury, the judge decides the case. In jury trials, the jurors deliberate and render a decision.
When the court issues a judgment against you, it includes the amount you owe the credit card company. You are expected to pay the judgment. If not, the company can take additional legal action to collect the money.
How Can a Credit Card Company Collect a Judgment?
Post-judgment collections may include one or more actions. Ways the company may try to collect the judgment include, but are not limited to:
- Attachments on bank accounts and real estate
- Ask the court to allow the company to take money owed to you
- Conduct an asset discovery deposition to determine what assets you own
- File a new lawsuit to obtain payment
Allowing the collection lawsuit to reach this point is not in your best interest. As soon as you are served with a credit card lawsuit, contact a bankruptcy attorney. Filing bankruptcy stops the lawsuit. If the debt is dischargeable, the bankruptcy case eliminates the debt, and the company cannot take further action to collect the debt.
Contact Our Massachusetts Bankruptcy Lawyer for Help
Call Logan A. Weinkauf, P.C., to schedule a free consultation with our Massachusetts bankruptcy lawyer. We can review your options for dealing with a collection lawsuit to determine which option is best for you.