Can a Credit Card Company Sue Me? What You Need to Know

Yes, a credit card company can sue you for unpaid debt. They can file a lawsuit if you stop making payments for several months. You need to understand your rights and options when facing credit card lawsuits.

US credit card debt reached $1.13 trillion in 2024. If you’re struggling with credit card payments, you face real legal risks. Credit card companies will take legal action to recover their money.

What Happens When You Miss Credit Card Payments

Missing payments triggers a predictable collection process. You’ll receive notices first, then phone calls within 30 days.

The credit card company will escalate their efforts quickly. They may hire a debt collection agency to pursue you. Your credit score will drop significantly when this happens.

Many people assume credit card companies won’t sue over small amounts. That’s a dangerous misconception. Credit card companies know most people won’t respond to lawsuits. They can recover legal fees if they win, making lawsuits profitable.

When collection agencies get involved, they have the same legal rights as the original creditor. Our partner Solo can help you respond effectively to these lawsuits.

What Happens When a Credit Card Company Sues You

You’ll receive court documents called the Summons and Complaint. These documents outline the debt and the lawsuit details.

You must respond with a written Answer before your state’s deadline. Deadlines range from 14 to 35 days depending on your state.

Failing to respond leads to a default judgment. The credit card company wins automatically. They gain legal power to garnish your wages and place liens on your property.

Filing an Answer protects your rights. The court may schedule a hearing where you can negotiate a settlement. Settlement often provides the best outcome when you truly owe the debt.

Your State Deadline Matters

Each state sets different deadlines for responding to lawsuits. California gives you 30 days. New York allows 20 or 30 days depending on service method. Texas provides 14 days after service.

Missing your deadline removes your ability to defend yourself. The court will likely grant a default judgment. You lose all negotiating power once a judgment enters.

Courts may give you a second chance, but don’t count on it. Judges prioritize cases where both parties participate. Ignoring a summons guarantees you’ll lose.

What Happens After the Credit Card Company Wins

A judgment gives creditors powerful collection tools. They can garnish your wages directly from your paycheck. They can place liens on your home or car.

When you sell property with a lien, the creditor takes their share first. You receive what remains after the debt is satisfied.

You won’t go to jail for unpaid debt. However, you can be arrested for contempt if you ignore court orders. Always appear when the court summons you.

Wage garnishment continues until the debt is paid in full. The creditor can take up to 25% of your disposable income in most states.

How to Respond to a Credit Card Lawsuit

Responding quickly gives you the best chance of a favorable outcome. You have several options to consider.

Verify the Debt Is Yours

Debt collectors sometimes make mistakes. They may sue the wrong person or inflate the amount owed.

Request written documentation proving the debt belongs to you. Send your request by certified mail to create a paper trail.

The collector must provide your original credit card agreement. They must also prove the debt was assigned to them legally.

Review all documentation carefully. Check the debt amount, dates, and creditor information. Errors give you grounds to fight the lawsuit.

Negotiate a Settlement

Settlement avoids trial and reduces your total payment. Contact the credit card company to discuss payment options.

Creditors often accept lump sum payments for less than the full amount. They may also agree to installment plans that fit your budget.

Our partner Solo helps you negotiate fair settlements with creditors. You can pursue settlement on your own or hire representation.

Always get settlement agreements in writing. Verbal agreements won’t protect you if disputes arise later. Written agreements specify payment terms and debt forgiveness clearly.

Pay the Debt in Full

Paying in full resolves the account immediately. It stops the lawsuit and prevents wage garnishment.

The collection account stays on your credit report for seven years. Your credit score won’t improve dramatically just from paying in full.

Consider this option only if you have the funds available. Don’t drain emergency savings to pay collection accounts.

File for Bankruptcy

Bankruptcy provides a last resort when you can’t pay. It stops wage garnishment and discharges most credit card debt.

You must file before the court enters judgment against you. Bankruptcy becomes more complicated after a judgment.

Consult a bankruptcy attorney to understand your options. Chapter 7 erases most unsecured debt. Chapter 13 creates a repayment plan you can afford.

Understanding Statute of Limitations on Credit Card Debt

Credit card companies must sue within your state’s statute of limitations. The statute of limitations creates a deadline for filing lawsuits.

Most states set the limit around six years. Some states allow only three years. Others permit up to ten years.

The clock starts when you miss your first payment. Making a partial payment can restart the clock in some states.

If the statute of limitations expired, you have a powerful defense. You can use this as an affirmative defense in your Answer. The court will dismiss the case if the debt is time-barred.

Common Statute of Limitations Periods by State

• California: 4 years
• Texas: 4 years
• Florida: 5 years
• New York: 6 years
• Illinois: 10 years
• Ohio: 6 years

Check your specific state’s statute of limitations before responding. Time-barred debt gives you an immediate path to victory.

How to File Your Answer Document

Your Answer formally responds to each allegation in the Complaint. You must file it with the court and serve the plaintiff.

Address each numbered paragraph in the Complaint. Admit what’s true, deny what’s false, and state if you lack knowledge.

Include affirmative defenses that apply to your case. Common defenses include statute of limitations, lack of standing, and incorrect debt amount.

Our partner Solo walks you through each step of creating your Answer. The process takes about 15 minutes to complete.

You can file your Answer yourself or have it filed for you. Attorney review ensures your document includes all necessary legal elements.

What Happens After You File Your Answer

Filing your Answer keeps the case active. The credit card company can’t get a default judgment against you.

The court may schedule a hearing or settlement conference. Both parties attend to discuss resolving the debt.

Settlement conferences provide opportunities to negotiate payment terms. Judges often encourage settlements to clear their dockets.

If you can’t reach a settlement, the case proceeds to trial. You’ll need to present evidence and argue your case before a judge.

Most credit card cases settle before trial. Creditors prefer guaranteed payments over uncertain trial outcomes.

Protecting Your Rights During Collection

Debt collectors must follow the Fair Debt Collection Practices Act. They can’t harass you, lie, or use abusive tactics.

Document every interaction with collectors. Keep records of calls, letters, and payment arrangements.

You have the right to request validation of the debt. You can dispute inaccurate information on your credit report.

Never ignore collection lawsuits hoping they’ll disappear. Ignoring legal papers guarantees the worst possible outcome.

Take action immediately when served with a lawsuit. Quick responses give you more options and better negotiating power.