I’m being sued by a credit card company. What do I do?

First, you need to take a deep breath. Yes, a sheriff’s deputy just came to your house to serve you with legal papers, but no, you are not going to jail. This is a civil lawsuit, and there will be a hearing in a magistrate’s court (district justice) or a Common Pleas Court (I’m talking to you Pennsylvania residents here). Read the fine print of the lawsuit complaint very carefully. The hearing is not automatically scheduled. The hearing will only be scheduled if you file a written response!

Second, you should speak with a qualified attorney about defending the case. Frequently, credit collection companies purchase old credit card accounts and file lawsuits against individual cardholders. These accounts are frequently stale, meaning that the time to file a lawsuit has passed (the “statute of limitations”). Speak with an attorney about your specific circumstances.

You should realize however that the judge hearing your lawsuit case will not serve as a mediator to determine a payment plan. The judge’s job is to determine whether or not you owe the debt. If you lose the lawsuit, there will be a judgment against you. In Pennsylvania, that judgment serves as an automatic lien against any real estate you own. In addition, the creditor can possibly garnish your bank account. Remember however that the creditor cannot garnish your paycheck in Pennsylvania unlike in other states.

Finally, you should take this opportunity to examine all of your debts. Frequently, a lawsuit is a warning sign of other financial problems. And there may be many other debts that are troubling you as well. Therefore, you may want to consider some form of debt relief such as bankruptcy. If you decide to file bankruptcy, then this debt along with other unsecured debts will be wiped out, along with the lien on your property.

3 Comments on “I’m being sued by a credit card company. What do I do?”

  1. I have not filed for bankruptcy I’m trying to figure out a way to settle this and get it removed from my credit report and my house properly

    1. Rolando,
      The best thing is to get a credit report first (www.annualcreditreport.com is the site). I ask new clients to first do this and to email me a copy of their credit report. Having a clear view of someone’s debt situation is the best way to start. Then I would want to know about someone’s monthly income and expenses. The reason is that the bankruptcy laws require the reporting of all household income over the past six months in order to determine one’s eligibility for Chapter 7 bankruptcy. Then I would want to discuss overall assets. These are all the types of discussion topics that any bankruptcy attorney would want to know. Thanks.

  2. I am being sued by Discover Bank for 6,000, I haven’t had a full time job since 2020 and Filed for disability for health reasons. I have no assets and can’t afford a lawyer for representation. I have other credit cards that I owe and would probably have to file for bankruptcy. My spouse is the only income provider and is paying everything. What can I do?

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