What to Do If You’re Sued by a Credit Card Company

Being sued by a credit card company can be a stressful and intimidating experience. If you've received a summons and complaint, it's important to act quickly and strategically to protect your rights and avoid default judgment. At Mosakowski Law, PA, we help individuals understand their options and fight back against aggressive creditors. Here's what you need to know.

1. Don’t Ignore the Lawsuit

Ignoring a credit card lawsuit won't make it go away—in fact, it will almost certainly make things worse. If you fail to respond within the deadline (usually 20–30 days, depending on your state), the court may enter a default judgment against you. This means the credit card company can begin collection efforts, such as garnishing wages or levying your bank account.

Takeaway: Always respond to a lawsuit. Ignoring it can lead to automatic judgment in favor of the creditor.

2. Verify the Debt and the Plaintiff

Often, credit card debts are sold to third-party debt buyers. By the time you're sued, the original creditor may no longer be involved. It's critical to confirm:

• The plaintiff has legal standing to sue you

• The amount they claim is correct

• The debt actually belongs to you

You have the right to demand that the creditor prove their case—including producing account records, contracts, and the chain of assignment if the debt was sold.

Tip: Many debt buyers lack sufficient documentation to prove their case in court.

3. File a Formal Answer with the Court

Your Answer is your legal response to the allegations in the complaint. In it, you’ll admit, deny, or state you lack knowledge of each claim. You may also raise affirmative defenses, such as:

• The statute of limitations has expired

• The debt was already paid or settled

• You are not the account holder

• Identity theft or fraud occurred

This is a critical document. If drafted incorrectly, you could waive important defenses. However, you are usually not required to file an answer in small claims court.

Consider contacting a consumer protection attorney to help prepare your Answer or review it before filing.

4. Explore Settlement or Negotiation

If the debt is valid, you may want to consider settling the lawsuit. Creditors often prefer to settle rather than go to trial, especially if documentation is lacking.

Settlements may include:

• A lump-sum payment for less than the full amount

• A payment plan

• Dismissal of the case upon payment

Warning: Always get any settlement agreement in writing before sending money.

5. Understand the Consequences of a Judgment

If the court rules against you or you don’t respond, the creditor may:

• Garnish your wages

• Freeze your bank accounts

• Place liens on property

A judgment will also appear on your credit report and can affect your ability to obtain loans, housing, or employment.

However, certain assets and income may be exempt from collection depending on your state's laws.

6. Consider Chapter 7 Bankruptcy

In many cases, if you're facing multiple debts and lawsuits, bankruptcy may provide the fresh start you need. Filing for bankruptcy can:

• Immediately stop lawsuits and collection activity (via the automatic stay)

• Discharge unsecured debts, including credit card balances

Bankruptcy isn't right for everyone, but it can be a powerful legal tool in the right circumstances. Learn more about Bankruptcy.

7. Speak With an Attorney

Defending a credit card lawsuit alone is possible—but challenging. An experienced attorney can:

• Evaluate the strength of the case against you

• Help prepare and file court documents

• Negotiate favorable settlements

• Represent you in court

At Mosakowski Law, we offer consultations to help you understand your rights and options when facing a credit card lawsuit.

Final Thoughts

Getting sued by a credit card company is serious, but it doesn’t have to end in disaster. With the right legal guidance and prompt action, you can assert your rights, challenge the lawsuit, and potentially resolve the debt on favorable terms.

📞 Need help with a credit card lawsuit? Contact Mosakowski Law, PA today for a consultation.