Can your creditors sue you for credit card debts?
Posted on Saturday, December 5th, 2009 at 2:33 pm in Financial Planning
If you have run up a significant amount of credit card debt, a question might pop up in your mind – can you be sued for credit card debts? Yes, you can be sued but only in specific situations. If you lag behind on your monthly credit card payments for over 60 days or a court order has been issued against you, your creditors might file a lawsuit against you. Nevertheless, creditors normally try to stay away from initiating legal proceedings and rather use techniques that make you pay them off. Rather than filing a lawsuit against you, creditors see whether you have a co-signer. If you have one, he can pay off your dues when you’re unable to do so.
If the creditor finds out that you’re doing a stable job that helps you earn sufficient income, then they would assume that you have the capacity to pay them off. In this type of a situation, they can sue you. Nevertheless, elderly debtors who don’t have a steady source of income might not receive such treatment because creditors understand their situation.
As a matter of fact, the reason why creditors offered a loan to you might be the same reason why they would chase you for recovering their money. When you get a notice from the creditor, you must check the authenticity of their claim. This can be done by checking the Statute of Limitations (SOL). If you see that your credit account is well past the SOL, it can work as your protection. If the situation is something different, it is advisable that you pay off your debts if the creditor has made a genuine claim. This is sensible only due to the reason that if a court order is passed against you, it would remain on your credit report for up to 7 years. This would have an adverse effect on your credit score. Taking into account your best interest, it is better that you bargain with your creditor to set up a repayment plan that can make you debt free.
If you’re undergoing financial problems or you can predict that a financial dilemma would take place in future, then you must talk to your creditors beforehand. This would ensure that you can arrange an alternative payment strategy and you don’t lag behind on your payments. It would ultimately stop the creditor from suing you.
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