Can a Credit Card Company Sue You?

Q: I am not sure if I am being scammed or not, but I got served with a lawsuit this past week. It’s for a delinquent credit card debt that I do owe, but it seems to say that the credit card company itself is suing me. It’s a moot point, as I’m so broke that I’m moving back to Tampa to live with my parents. Can a credit card company sue you?

A: I’m sorry to hear about your financial issues, but getting right to the point – yes, they can sue you. In fact, banks like Capital One have figured out that if they do it in house they have more control and stand a better chance of getting more of the money paid back. The worst possible thing that you can do now is to ignore that summons and complaint. If you don’t answer or show up, you’re looking at a default judgement that will be very hard to shake.

If you are in dire financial straits, you may want to consider filing for bankruptcy. Far from being the end of the road, it can give you a way out of the weeds and relieve you of crushing debt. The automatic stay of collection activity provided by a bankruptcy filing – either a Chapter 7 or Chapter 13 – immediately stops all lawsuits for collection activity. This could give you some breathing room, and let you get your financial house in order. Yes, your credit will take a hit, but once you exit bankruptcy, your debts are over and done with.

However, you should also note that a number of banks are acting to enforce the arbitration clause in their contracts. Some of them are actually using this to try and circumvent the automatic stay, and there are a number of cases before the courts of appeal. Arbitration clauses are controversial because they prevent plaintiffs from bringing a suit in court against the company they feel has wronged them, which is considered to be a constitutional right. Overwhelmingly, consumers want to bring suits in court against banks and credit cards that violate their trust. Overwhelmingly, 70 percent of banks include arbitration clauses in their financial products – including credit cards – and really don’t want class-action suits against them coming to court. However, they are entirely free to sue you.

It sounds like your financial problems are very complex, and you shouldn’t be going through them alone. Credit card companies, loan companies, and banks have attorneys on their side – and so should you. We offer free initial consultations at our Fort Lauderdale and West Palm Beach offices, and we are open seven days a week to help you get a grip on your finances. I’m urging you to give us a call so that we can put you on the road to recovery. You may not even need bankruptcy if we can find some other solution such as consolidation. Call us today, and let’s get started!