What You Should Know About Credit Card Delinquencies and Potential Lawsuits Credit card debt is the most common form of debt that is unsecured.  This means that if you default on payments or choose not to repay what is owed, the credit card company has a right to sue.  Depending on what is owed on the account, a lien may be placed against property or you could experience garnishment of wages.  Taking advantage of your rights includes validating debt in question and understanding the statue of limitations.

After so many days of without payment being made on your account, the debt gets charged off or written by the credit card company as a loss.  This may happen after about 180 days or so.  The credit card company sells the debt to debt collectors or a collection agency.  While many wonder whether or not a credit card company will sue for unpaid debt, they could but it is more likely a lawsuit would be filed by the collection agency.

Larger amounts of credit card debt may prompt the credit card company to file a suit against you.  One of the main reasons why debt is charged off is because credit card companies get a tax exemption.  If you are being sued and fail to show in court or answer the summons set to you, a default judgment is likely.

Debtors who request validation of debt are more likely to show up on a scheduled court date.  Validation makes sure the debt is yours if you learn about it from a collection agency.  The statue of limitations begins from the last day a payment was made and affects when a creditor can sue for debt owed.  If the limitation has passed, this is information that can be presented in court for time-barred debt.

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