Advice About a Civil Suit on an Old Credit Card Debt

Is it possible to settle out of court for a civil suit on an old credit card debt?

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Bill's Answer: Bills.com Resident Expert

The simple answer to your question is yes, it may be possible to negotiate a repayment arrangement with this creditor out of court to prevent this lawsuit from proceeding any further.

First, you should carefully review your finances to determine what you can afford to pay each month to resolve this debt. Be honest with yourself about your financial situation and you ability to pay; if you overextend yourself, then you will likely end up defaulting on your new payment plan, which could make resolving the account even more difficult in the future. Once you have an idea of what you can afford, you need to contact the creditor’s attorney to try to negotiate a workable repayment plan. For example, the creditor may be willing to accept a percentage of the amount owed, say 80%, and allow you to repay that amount over the course of several years.

Some creditors are not willing to reduce the balance owed, but will still agree to a payment arrangement on the full balance to resolve the debt. It is relatively uncommon to find a creditor who simply refuses to negotiate with consumers, so I would be surprised if the creditor was not willing to offer you some type of repayment plan.

Generally speaking, once a lawsuit has been filed to collect on a delinquent account, the creditor will ask the consumer to sign a stipulated judgment, which states that the creditor will take a judgment against the consumer, but that it will not try to enforce the judgment as long as all agreed upon payments are made in a timely manner. The key to resolving this account in an affordable manner is to contact the creditor’s attorney as soon as possible before the creditor escalates its collection efforts any further.

Due to the fact that this creditor has filed a lawsuit against you, you may wish to consult with an attorney in your area to discuss your situation and how you should respond to the lawsuit. In addition, your attorney could likely assist you in negotiating an affordable repayment arrangement with the creditor, which may be easier if you feel uncomfortable contacting the creditor’s attorney yourself. Also, if for some reason this creditor is not willing to negotiate affordable repayment terms, an attorney should be able to discuss the alternatives available to you to help you resolve this lawsuit. Bills.com offers some tips for consumers who are trying to negotiate with their creditors, available online at the debt settlement section.

As I mentioned, the most important steps for you to take right now are to determine how much you can afford each month, and to then contact the creditor to try to work out a repayment plan to resolve this lawsuit. If you are able to reach an agreement with the creditor, I strongly encourage you to obtain a letter from the creditor or its attorney outlining the agreement upon terms before you make any payments to the creditor. Having a written agreement will provide you with evidence of the repayment plan if the creditor ever tries to renege on the settlement. If you would like to read more about the various options available to consumers struggling with their debts, I invite you to visit the Bills.com debt help page.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

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Comments (119)


Kennith P.
Goldthwaite, TX  |  May 03, 2012
Someone I know was just served , since I handle their bills can I contact her creditors or should I have my attorney do it?

Also, a gas credit card company that I never used and cancelled is trying to claim I owe them money but I never used the card, what should I do, the bill is only $100 so it's not worth attorney fees but I know I don't owe them.
Bills.com
May 07, 2012
1) It is unclear if you have power of attorney for "the someone you know." If you do not have power of attorney, you would be a good friend if you would explain the service of process and summons to this someone, and then help them find a lawyer to answer their questions.

2) Regarding the gas credit card, on what basis does the issuer claim you owe $100? Was this an annual fee of some kind? Was the $100 the total of a series of transactions? If someone you did not authorize used the account, then file a claim with the card issuer. If, on the other hand, the $100 is an annual fee for opening the account, then I do not see you have much to stand on.
Herman P.
March 16, 2012
What are the documents needed by the junk debtor to collect on a suit?
Bills.com
March 16, 2012
Please see the Bills.com resource Debt Validation for a discussion of what level of proof is necessary to validate a debt.
Tammy G.
February 22, 2012
Hello - I received a summons today on an old debt from a furniture company. I had full intentions on paying but ran into a financial situation where it was more important to pay medical bills and my hubby was out of work. I'be been reading about the SOL and even though the original transaction occurred in 2005 the date that is being ref in the Affidavit is three years later. If I was trying to go the route of the SOL wouldn't I be referencing the original date? Also - people have told me it is better to try to settle in court vs before since the lawyers are normally better to work with than the debt collectors - do you think that is total rubish? I'll be representing myself in TN
Bills.com
February 22, 2012
The Statute of Limitations is based on a running clock from the date of your last payment, not when the original transactions took place. If you feel that the debt has passed the SOL, then go to court and raise the SOL as an affirmative defense. Why settle the debt, if you are not legally required to pay it?

You may want to speak with a lawyer, who can review all the facts and give you a professional opinion on whether the SOL will protect you. He or she can review the opposing side's paperwork, to weigh the validity of its claim that the proper date is 2008.
Joy V.
Laguna Woods, CA  |  September 23, 2011
I entered into a stip judgement w/ a creditor/atty on an old credit card debt. They both know I have retained a bk atty but I couldn't open the file before the court date. I should be filing the bk within 2 weeks. They are trying to collect on the judgement. Can they do this? Is there a period of time between the filing of the judgement and when I HAVE to begin payments? Any info would be appreciated.
Bills.com
September 23, 2011
A judgment-creditor can begin collections as soon as it has the judgment in hand. I know of no statutory waiting period in any jurisdiction that mandates a waiting period before collections can begin.

Just because a judgment-creditor asks you to start payments on the judgment does not mean you need to do so, unless a court so orders it. Consult with your bankruptcy lawyer about this issue. He or she has details about your judgment that I do not.
Vanessa G.
September 15, 2011
I had several credit cards when i lived at usa (florida). I could'n get the residence so i was deported to mexico (2006) and the bills were not paid... what can i do??
Bills.com
September 16, 2011
I see two options: Pay the balance as you can, or ignore the debt. If the debt is small, then I doubt the credit card issuer will attempt to locate you. If the debt is large, then you can expect the credit card issuer will attempt to collect the debt in your home country.
Lisa B.
Fresno, CA  |  September 11, 2011
I have two lawsuits pending against me. I'm challenging both, responding with an answer and filing discovery. The first is in limbo. They never responded to my discovery requests so I filed a motion to compel and it was dismissed because my request was not filed with in correct time frame. HOWEVER, now it's just in limbo and nothing is happening. They have not filed anything else and now just call with recorded requests for the money. So my QUESTION IS, what do I next as far as filings with the court. (It has been over 3 months) The second lawsuit has not responded to my request for discovery and instead sent me a letter of settlement which is basically written to the court saying I agree to make payments and they would like to dismiss with prejudice. I have not agree to anything and do not plan on paying anything. I think it's just a trick to get me to admit guilt and/or acceptance that this is my debt. I want us to proceed in court because I dont think they will win. So my QUESTION is, do i need to respond to their letter?
Bills.com
September 12, 2011
You are asking for legal advice, which I cannot provide. Consult with a lawyer in your state who has civil litigation experience. He or she will analyze the documents relating to your case in detail, and will advise you accordingly.
Meli R.
San Diego, CA  |  September 07, 2011
I have several unpaid credit card debts after being laid off in 2008. Most of the debt has been sold and sold again but I have one credit card company that filed a civil lawsuit under Rule 3.740 Collections. They even attempted to serve me at a previous address but I was no longer residing at the home. When I check the status it just lists the case as "pending". It has been pending for over 250 days. What further action can they take against me and how should I proceed? I truly don't want to file bankruptcy since the SOL on these debts is next year.
Bills.com
September 08, 2011
The issue at the heart of your question concerns the civil procedure rules for your state. Were you given adequate notice of the lawsuit? Consult with a lawyer in your state who has civil litigation experience to learn the status of the complaint filed against you.
Kim A.
Mountain Home, AR  |  September 04, 2011
I won an old credit card collections suit which was dismissed without prejudice over a year ago. Arkansas law states that the creditor can re sue within 1 year of the dismissal. The collection company never refiled, but sold account to a different collection agency. My question is...can the new collection agency refile against me? Or did the refiling have to be done within the year regardless of who has the debt now.
Bills.com
September 06, 2011
If the new collection agent files a lawsuit regarding the debt in question, you have a good estoppel argument you can apply in answering the complaint, and a fair res judicata argument because the new action is based on transaction or occurrence that was already litigated by a different party.
Jen P.
Norwalk, CA  |  August 31, 2011
My husband was sued for an old credit card debt. He tried working with the collector but they wouldn't budge, so he filed a response to their summons and got a court date, which was today. He showed up and was told by the clerk that the case was dismissed. We don't have any paperwork, yet. The clerk said it would be mailed to us. What does the dismissal mean?
Bills.com
August 31, 2011
It means that the lawsuit was either dropped or dismissed by the judge. This means that you did not have a judgment placed on you by your creditor (so you cannot be garnished, levied, or have a lien placed on an asset). Congratulations. It does not necessarily mean that they cannot try to collect in the future though.
Tony S.
Canyon Lake, CA  |  June 22, 2011
I reside in California and have old credit card debt (3 years) that was taken over "I guess" by an attorney and today received a summons regarding the debt. My question is The last page of the summons states "you are hereby noticed to personally appear on a date that is then end of next year 12/13/12. Why would they summons me today for a court date that is almost 18 months away? Thanks
Bills.com
June 22, 2011
No California court would issue a summons for a hearing 18 months into the future. Either that date is dead wrong, or the summons you received is bogus.

Take the summons to a California lawyer who has experience in civil litigation. He or she will sniff out a fake summons in seconds.
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Tony S.
Canyon Lake, CA  |  June 22, 2011
Thanks for your help: here it is straight from the county court house: valid lawsuit according to the county: Action Text Disposition 12/13/2012 10:00 AM DEPT. T1 HEARING RE: ORDER TO SHOW CAUSE WHY SANCTIONS SHOULD NOT BE ISSUED AGAINST PLAINTIFF FOR FAILURE TO FILE DEFAULT JUDGMENT PURSUANT TO CRC 3.740 (TEMECULA).
Bills.com
June 22, 2011
Amazing. Apparently, some California courts do schedule 18 months in advance.
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