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Should I Get a Lawyer if My Credit Card Company Files A Case On Me?

This is a question asked by many people who find themselves in a debt trap on account of gambling, lack of fiscal discipline, job loss, expensive divorces etc. In such a scenario, should they consult a lawyer to help them out in a lawsuit against them or should they wait and watch and do nothing.

There are many reasons to consider hiring the services of a lawyer particularly if there are chances that the law may have certain provisions which may favor you. Let’s see some of the reasons as to why should you consider hiring a lawyer for your defense against a lawsuit.

Time-barred for filing suit against you

A lawyer will be able to guide you properly by letting you know if you can invoke the Statue of Limitation in the fight against the credit card company. The statute of limitations states that if your debts are time-barred, then your creditor cannot sue you. In other words, if a certain amount of time has elapsed since the last payment was due, then the creditor can’t sue you. The Statute of Limitations is calculated from the time of your first payment that was due.

But one has to check the time limit required to raise the statute of limitation as a defense.

The other factor in determining whether you can invoke this statute is whether you have an open credit or a closed credit.

— A typical example of an open credit is a credit card. Even if you don’t pay, the interest portion goes on ballooning.

— On the other hand, a closed-end credit is when there is a fixed amount of payment to be made, such as home loans, or personal loans etc.

Many creditors may try to position the closed-end account as an open-ended account in the court of law. You have to consult with your lawyer to determine the same, as it would decide if you can invoke this statute.

There many ways in which the statute of limitations may fail to work in your favor

  • When you waive it

In this case, you waive the stature when you agree to pay the creditor your old debt. Some states require this waiver to be in writing and other states, a simple verbal agreement is also valid.

Some people accidentally waive the statute. This could then be determined by the courts if the waiver was accidental or intentional.

  • When you extend it

The extension of the stature of limitation happens when the debtor agrees to make the payment to the creditor.

For eg., Linda gets 3 months to pay for her merchandise which she got on credit, from a mall. So her statute of limitation would start from the 3 months after she had made the actual transaction.

  • When you revive it?

This happens when you pay a partial amount towards the debt outstanding after a few years, you extend the date of limitation.

For eg. If Jack had bought a car in 2007 and hadn’t paid the debt until 2013, then he can claim protection under the statute of limitation, but on the other hand, he repaid one installment in 2014, he would then revive the date of statute of limitation, until its expiration after six years from 2014.

  1. b) Mistaken Identity

If there is a case of mistaken identity, you have a defense against the lawsuit against you. Mistaken identity generally happens when you share the same first or last name or both with the actual debtor. But this is easy to sort out as you would have to prove your real identity by furnishing your social security number, your passport, and other documents.

2) Unaware of the Ramifications of the law

Most of the people are oblivious to the consequences of the law. If a creditor sues you and you don’t know what would be its fallout, then it is best to consult a lawyer who would help you how to go about finding a feasible solution particular to your situation.

3) Settlement Negotiation

Many times to avert the tension on account of coming face to face of the creditor and the debtor, many debtors have their lawyers negotiate settlement terms on their behalf.

4) Unable or inexperienced to deal with collection agencies or the creditor

When you simply do not know how to deal with the debt collection agencies or the creditors, then it is a good thing to hire a good lawyer, who would deal in all matters relating to debt settlement or any kind of negotiations. Many people commit something at the time of negotiations with the creditor and this could be binding on the debtor.

Unable to Afford a Lawyer?

If you need the assistance of legal services and are not able to afford one there is legal aid available in the form of free or low-cost legal aid programs. You should try approaching them to get a sound legal advice. Even if you don’t qualify for such programs, it is a good idea to consult a lawyer on an hourly basis so that you know fully aware of your rights and the options available to you.

Thus, in the final analysis, it is always beneficial to seek expert legal advice so that you don’t land up on the wrong side of the law.

2 thoughts on “Should I Get a Lawyer if My Credit Card Company Files A Case On Me?”

  1. Chris Grundling

    Dear Team,

    Helpfull article, thank you, can you give me advice on the below:

    I have lost my job and filed for credit card shield and the credit card company still wants me to pay while i have applied for credit card shield, this month i have not paid the credit card as i dont have any money anymore and they are threatening me to file a case, please could you give me some advise?

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