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Credit Card Lawsuit

Credit Card Lawsuit
Mark Cappel
UpdatedApr 9, 2024
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    4 min read
Key Takeaways:
  • What to do if you receive a summons.
  • Consult with a lawyer to learn more about your state's rules.
  • You may be able to fight a credit card lawsuit successfully.

Why You Should Not Ignore a Credit Card Lawsuit.

If you receive a summons from a court or a law firm that concerns a delinquent credit card debt, do not ignore it. (Of course, you should not ignore a notice from a court regarding any matter!) A summons notifies a defendant of the time and place for a hearing or trial.

There are several reasons to pay attention to a summons, which is called a "summons and complaint" in some states. First, the debtor will lose the case automatically if it does nothing. This is called a summary judgment. Second, for a credit card lawsuit, all it may take for a defendant to win a case is to show up for their hearing.

The newspaper Collections & Credit Risk, a publication for people working in the debt collection business, reported in its February 1, 2012 edition that JPMorgan Chase & Co. and other banks do not have the evidence to support the accuracy of their own records. The newspaper quoted Christopher Willis, an Atlanta attorney for Ballard Spahr LLP, which specializes in defending banks in consumer lending cases. "If I were a collector of consumer debt, I’d look at my entire process from start to finish for whether there’s an argument to be made that the process is not verifiable," Willis said. "I think there is substantial danger."

Here is one section of the story of particular interest to people involved in a credit card lawsuit:

"Banks actually keep pretty crummy records," says Peter Holland, a University of Maryland law school professor who focuses on consumer debt. No less than the Association of Credit and Collection Officials, an industry trade group, has admitted as much. "[D]ocumentation is often unattainable for a variety of reasons, the most important of which is the creditor no longer has the information or did not have it when selling an account," the association wrote in a 2011 letter to the rules committee of Maryland’s Court of Appeals. "Greater discussion is needed to identify the type of proof sufficient to seek a judgment." Without access to the original creditor’s business records and procedures, collections agents cannot truthfully attest to the validity of the debt they’re seeking to collect. What’s more, unlike in the case of home, when the original amount borrowed is rarely in dispute, there are numerous instances in the public record of debt collectors filing suits involving bogus claims for other types of consumer debt. "The person [filing an affidavit] doesn’t have personal knowledge of the records, even though he says he does," says Charles Debaulm, an attorney for the National Consumer Law Center who has litigated robo-signing involving mortgages and other types of consumer debt. When challenged by a competent consumer defense attorney, "the debt [collections agency] buyer will simply dismiss the suit."

Original creditors (the credit card issuers), and collection agents win lawsuits because defendants rarely show up in court. As a result, plaintiffs to win default judgments. However, defendants who put up a fight in court will often win. Collections & Credit Risk quoted Michelle Weinberg, a supervisory attorney at the Legal Assistance Foundation of Metropolitan Chicago, who has defended 100 consumer debt cases over the last 10 years and lost only one. "Debt buyers know they cannot prove [their claims] if there's someone making proper legal objections on the other side," Weinberg said.

What to Do If You Receive a Summons

Here are the five steps you should take if you receive a summons for a credit card lawsuit, or believe there is a credit card lawsuit in process:

  1. Review your records to learn if you owe the debt.
  2. If you owe the debt, contact the law firm representing the creditor. Open a negotiation to see if they are willing to settle the debt. Why should you do this if appearing in court to argue a credit card lawsuit is often successful? Because once the parties are in court, they are never certain how a judge will decide a case. Reaching a pre-trial settlement creates definite terms for both parties.
  3. If you do not owe the debt or cannot reach an out-of-court settlement with the creditor, contact the court to make sure of its location, and of the date and time of the hearing. Do not take the opposition's word for when a hearing will occur.
  4. Gather all documents relevant to the case.
  5. Consult with a lawyer in your state to learn:
    • Your rights under your state’s laws.
    • Relevant civil procedure rules. A defective service of process may result in the case being dismissed.
    • Strategy for your defense.

See Advice on Judgment to learn more about what can happen if you lose a garnishment.

Did you know?

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in New Jersey, 16% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 3%.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.



VVince, Jan, 2014
I think a collection agent is going to sue me over a credit card debt. I'm about to move. Should I send a change of address card to the collection agent?
BBill, Jan, 2014
Two schools of thought here: • Don't shine a light on yourself: Lawyers who handle debt collection-related lawsuits have hundreds of cases on their desks. Chances are there's more than one person with your name in your area, and if you have a common name, there might be a dozen people with your name in your state. Which "John Doe" should the lawyer send the summons and complaint to? Even if the lawyer has an address for you on file, he or she has no way of knowing for certain if the address is current. Send a lawyer a notice of where you are and your file will pop to the top of the stack. • The lawyer will find you anyway, so get it over with: If you have an uncommon name and live in a rural area, you might as well let them know where you are. Or, if you know you have a solid defense to a lawsuit and are itching to use it in court, a change of address might speed up the inevitable and get the matter behind you.

Just because a collection agent says it plans to file a lawsuit against you does not make this statement truthful. Generally, consumers should avoid making life easy for collectors' lawyers.

BBill, Jul, 2010
There is no such thing as a tentative ruling before a hearing, at least under the common law, which is the underpinning for most state and federal law. Either there has been a hearing and the court made a finding, or not. You mentioned California. California courts do not make tentative rulings. The first thing you need to do is determine whether a hearing has occurred and what the court found. My guess -- note my word choice -- is that there was a hearing, you did not attend, and there was a default judgment against you. Now the judgment-creditor is attempting to garnish your wages, file a lien on your property, or levy your bank account. Consult with California attorney to learn your rights and liabilities. See also the resource California Collection Laws for more information.
jjames, Jul, 2010
I have a credit card lawsuit hearing and it looks like there had been a tentative ruling before even the hearing date. If I lose the argument, would I still be allowed to file a form to request to make payments? Also, is there a way to request to the judge that I can only afford so much taken out of my salary based on my income and financial situations? I am in California
BBill, Feb, 2010
I do not believe it is a violation of law for a credit card company to act as you described.
MMargarita Urrabazo, Feb, 2010
I want to know if a credit card company can increase my interest rate after i have called to cancell my card. Because this is what happened to me and i called and i was told that they did this because i cancelled my card.