For many people, receiving a credit card lawsuit summons is a panic-inducing occurrence. Although your first instinct may be to ignore the situation and hope it works itself out, a better option is to meet the challenge head-on. Answering the summons you receive is the first step to effectively fighting a credit card lawsuit. However, the next step depends on the actions of the plaintiff and the process the court uses to resolve these types of cases.
Filing your answer shows that you are willing to fight the lawsuit. This can sometimes cost the credit card company more in legal fees than the amount the company was suing you for, so it may choose to negotiate a settlement with you to avoid a costly trial. Usually, the card company’s lawyer will send you a settlement offer letter. If you approve of the terms, send your agreement in writing and begin making the payments as requested. If you want to negotiate further, put your proposed terms in writing and mail them back to the lawyer. Contact an attorney if you need help with the negotiation.
The credit card company may propose a mediation meeting with an independent third party to explore the possibility of a settlement and work out the terms of any agreements. Some court districts may require plaintiffs and defendants to come together at the courthouse to come up with a settlement agreement. If this is the case, the court will mail you a notice of the date, time and location of the settlement meeting. In all other cases, the card company or mediator will send you information about the meeting. It’s important for you, or your attorney, to attend, as failing to do so will allow the credit card company to set all the terms of the settlement, which will almost certainly not be in your favor. Some court districts allow plaintiffs to enter a default judgment if the defendant fails to appear at a mandatory mediation meeting.
If the credit card company is not interested in a settlement, the case will go to trial. Civil suit trials are usually heard by a judge and do not involve a jury. You can request a jury trial, but this is much more expensive and involved because jury trials require the expertise of a lawyer to choose a jury and properly navigate all the procedures that surround that task. The court will mail you a notice that contains the date, time and location of the trial, and you must attend to avoid a default judgment against you.
During the trial, you or your lawyer can present, examine and discuss evidence, ask questions of the plaintiff and any witnesses, such as employees who handled your account, and testify on your own behalf. You have a good chance of winning the case if the credit card company cannot furnish evidence that you actually owe the balance. This kind of proof comes from signed credit card agreements, billing statements, any other payment agreements you made in writing and witness testimony. Having a lawyer represent you in court will ensure all evidence the card company presents is valid and adequate to prove your liability for the debt.
If You Lose
If you lose at trial, or if you fail to show up to the settlement or mediation meeting, the court will award a judgment to the plaintiff. This is usually the balance you owe to the credit card company, plus court costs and legal fees. Although a judgment is a legally binding court order, you cannot go to jail for not paying. However, the credit card company has the right to garnish your paychecks and seize your assets, such as bank account funds, real estate and other property.
Lauren Treadwell studied finance at Western Governors University and is an associate of the National Association of Personal Financial Advisors. Treadwell provides content to a number of prominent organizations, including Wise Bread, FindLaw and Discover Financial. As a high school student, she offered financial literacy lessons to fellow students.