Can Credit Card Companies Sue You? What to Expect

Yes, credit card companies can sue you for unpaid bills. But they won’t sue you immediately after one missed payment.

Credit card companies typically wait six months or more before filing a lawsuit. They’ll contact you several times before taking legal action. While there are no guarantees, you’re less likely to face a lawsuit if you owe under $2,000.

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When Can a Credit Card Company Sue You?

Missing one payment won’t trigger a lawsuit right away. Credit card companies usually wait until your account has been in default for six months.

During those six months of missed payments, creditors report delinquencies to major credit bureaus. Your credit score will suffer serious damage during this period.

Signs You Might Be Sued

Credit card companies follow a predictable collection pattern. Filing lawsuits costs time and money, so it’s rarely their first step.

Once you fall behind, your account becomes delinquent. You’ll receive mail notices about your outstanding balance. You may also get emails if you have an online account.

After 30 days without payment, phone calls begin. The original creditor may hire a third-party collection agency. After several missed payments, they may charge off the debt and sell it to a debt buyer.

Another collection agency will contact you about the debt. They can also sue you if you don’t pay.

A credit card company cannot sue you without your knowledge. If they sue, you’ll receive a court summons and complaint.

How Long Before You Get Sued?

Each creditor sets its own terms. Lawsuits are usually a last resort for recovering payment. Most companies wait at least six months before taking legal action.

The amount of debt matters too. You’re less likely to be sued for debts under $2,000. You’re more likely to face a lawsuit if you owe more than $2,000.

What Happens in a Debt Collection Lawsuit?

Credit card companies or collection agencies file papers in local civil court. The filing includes a summons and complaint. The company filing is the plaintiff. You are the defendant.

The summons and complaint outline the debt collector’s claims against you. The papers tell you how long you have to respond. You must file a response within the stated time frame.

Response deadlines vary by state but typically range from 20 to 30 days.

You must answer the debt collection lawsuit. If you don’t, the creditor will likely win by default. A default judgment gives creditors access to collection tools like wage garnishment, bank account levies, or property liens.

If you’re worried about responding alone but can’t afford a lawyer, our partner Solo can help you draft an answer letter. They’ve helped over 280,000 people respond to debt lawsuits.

What Happens If You Don’t Respond?

If you ignore the lawsuit, you’ll usually lose by default. The court will issue a default judgment.

Losing a debt lawsuit exposes you to serious collection measures. Creditors can garnish wages, levy bank accounts, or place liens on property.

Wage garnishment takes money directly from your paycheck. A bank levy removes money from your bank account. Certain income types, like Social Security, are protected. But earned income can typically be garnished until your debt is repaid.

How to Respond to a Debt Collection Lawsuit

Your answer addresses each item the plaintiff listed in the complaint. You can handle this legal process yourself. Many courts have online self-help centers with paperwork assistance and court rules.

If you feel uncomfortable going alone, seek legal advice. If you can’t afford a lawyer, look for legal aid organizations. You can also use our partner Solo to draft your answer with a 100% money-back guarantee.

Don’t assume the complaint information is accurate. Even if you have unpaid credit card debt, creditors may make incorrect claims.

You can deny statements in the complaint. You can reply that you don’t know or understand certain statements. The legal phrase is “denied for lack of information.”

Forcing creditors to prove their allegations may give you negotiating power. You might settle with the creditor outside of court.

Other Options If a Credit Card Company Sues You

Answer the complaint, but also pursue other options simultaneously.

Negotiate a Debt Settlement

In a debt settlement, you negotiate to pay less than the full amount. You usually need to pay in one lump sum. In rare cases, you might negotiate a payment plan.

A settlement proposal shows the credit card company you want to resolve the debt. Sometimes this approach helps settle the matter quickly.

Work With a Credit Counselor

Credit counselors provide free consultations and help organize your finances. They’ll negotiate with credit card companies on your behalf. Working with them reduces stress too.

A debt management plan simplifies repayment and can lower your interest rate. Our partner Cambridge Credit Counseling can help you explore these options.

Pay the Full Amount

Paying the debt in full makes the lawsuit go away. Most people getting sued can’t afford to pay the full amount. But if you agree you owe the debt and can pay it, doing so spares you the lawsuit hassle.

File Bankruptcy

Many people view bankruptcy as a last resort. But if you have substantial unpaid credit card debt you can’t repay, consider it seriously. A credit counselor can help you decide if bankruptcy or another debt relief option works better.

Filing bankruptcy immediately stops all collection activities. Phone calls, lawsuits, and wage garnishment halt instantly. If your case succeeds, you’ll erase unsecured debts like credit card balances, medical bills, and personal loans.

You can speak with a bankruptcy attorney for free to understand your options.

Your Rights and Defenses in a Debt Collection Lawsuit

Financial distress causes mental and emotional strain. Being sued or fearing a lawsuit compounds this stress. Try to remain calm. Learning about the process empowers you to take action.

Here are important actions to protect your consumer rights:

Request a debt validation letter from any creditor or debt collector who contacts you. Asking for this in writing shows you’re serious. Send your request via certified mail.
Ask if the statute of limitations has passed for the debt. By law, creditors and debt collectors must tell you. If the debt is outside the statute of limitations, it’s time-barred. You can use this as a strong defense to get the case dismissed. Statutes of limitations vary by state.
Check your credit report regularly to ensure you haven’t been a victim of identity theft. If you notice suspicious activity, contact your credit card company immediately.
Know your Fair Debt Collection Practices Act (FDCPA) rights. Federal law prohibits third-party debt collectors from harassing you or using unfair collection practices. FDCPA violations can be used as a defense in lawsuits.

The Consumer Financial Protection Bureau (CFPB) enforces the FDCPA. If a debt collector violates the law, you can file a complaint with the CFPB.

Key Points About Credit Card Lawsuits

If you don’t make monthly payments, you can be sued. First, credit card companies or collection agencies will contact you. If they can’t recover the debt within six months, a lawsuit may follow.

If you get sued for credit card debt, stay calm. Read the complaint carefully and decide how to proceed. Answer the lawsuit by the deadline listed in the summons.

You can negotiate a settlement, get on a debt management plan, or file bankruptcy. Each option has advantages depending on your financial situation.

Frequently Asked Questions

What is the typical timeline before a credit card company sues?

Credit card companies usually wait at least six months of nonpayment before filing a lawsuit. During this period, they'll contact you multiple times through mail, phone calls, and collection agencies. Filing lawsuits costs time and money, so companies use it as a last resort after other collection attempts fail.

How do I respond to a credit card lawsuit summons?

You must file a written answer with the court within the deadline stated in the summons, typically 20-30 days. Your answer should address each claim in the complaint. You can deny statements, state you lack information, or assert defenses like statute of limitations. Many courts have self-help resources, or you can use services like our partner Solo to draft your response.

Can I negotiate with a credit card company after being sued?

Yes, you can negotiate a settlement even after being sued. Credit card companies often prefer settlements over lengthy court battles. You can propose paying less than the full amount, usually in a lump sum. Negotiating while also filing your answer shows you're serious about resolving the debt and may give you leverage.

What happens if I ignore a credit card lawsuit?

If you ignore a lawsuit, the court will issue a default judgment against you. This gives the creditor legal power to garnish your wages, levy your bank accounts, or place liens on your property. Earned income can be garnished directly from your paycheck until the debt is repaid, making it critical to respond to any lawsuit.

Will bankruptcy stop a credit card lawsuit?

Yes, filing bankruptcy immediately stops all collection activities, including lawsuits, through an automatic stay. If your bankruptcy case is successful, unsecured debts like credit cards, medical bills, and personal loans can be completely discharged. Speak with a bankruptcy attorney to determine if Chapter 7 or Chapter 13 bankruptcy is right for your situation.

Can a Credit Card Company Sue You for Unpaid Bills?