credit card lawsuits

Can a Credit Card Company Sue You for Unsecured Debt?

Do you owe money to a credit card company? Have they been harassing you with notices and phone calls demanding payment? Are you worried the debt might end in court if it isn’t paid off soon enough?

If so, then this article is for you. In it, we will tackle the question: Can a credit card company sue you for unsecured debt?

This article will explain everything there is to know about credit card lawsuits and provide tips on handling such cases should they arise. If you need more help, contact a debt collection harassment attorney with Ware Law Firm today.

What Is Unsecured Debt?

Unsecured debt is a type of loan that doesn’t require collateral. It’s based on the borrower’s creditworthiness and ability to repay the money. Unsecured debt can include personal loans, medical bills, student loans, and credit card debt. When taking out an unsecured loan, there is no guarantee that the investment will be repaid.

For this reason, when someone fails to repay their unsecured debt in full or on time, creditors may decide to take legal action against them by suing for repayment. This means that, yes, a credit card company could sue you for unpaid unsecured debts.

How Does a Credit Card Company Collect Unsecured Debt?

When it comes to collecting unsecured debt, credit card companies have a few options, including:

  1. They may contact the debtor directly via phone or mail to collect payment.
  2. They can pass on the debt to a collections agent who will also reach out using similar methods.
  3. They may take legal action by filing suit against the debtor in court.

It’s important to note that these steps must be taken before any lawsuit is initiated. Credit card companies cannot file a claim without first making attempts at collection.

What Is the Statute of Limitations on Unsecured Debt?

When it comes to unsecured debt, certain laws govern how much time must pass before a creditor can sue you for this type of debt. This is known as the statute of limitations. The statute of limitations varies depending on the state and the type of debt.

In some states, the statute of limitations may be as short as two years, while in others, it may be as long as 10 years. It is important to note that the statute of limitations only applies when a creditor can sue a debtor; it does not mean that the debt disappears after the time limit has passed.

Once the statute of limitations has expired, the creditor cannot legally sue the debtor for the unpaid debt. However, the creditor may still attempt to collect the debt through other means, such as sending letters or making phone calls to the debtor.

What Happens If You Are Sued by a Credit Card Company?

When a credit card company decides to sue you for unsecured debt, they take you to court. This means the creditor is seeking either payment of the outstanding balance or financial compensation from you.

To do this, the credit card company must win its case in court and prove that you owe them money. If successful, the court may require you to repay the original amount plus interest and fees.

Sometimes, creditors can obtain a judgment against you even if you don’t appear in court. Even if a judgment is issued, it doesn’t necessarily mean your wages will be garnished. However, it does give the creditor more options when pursuing repayment from you, such as freezing bank accounts or seizing assets.

It pays to take precautions beforehand and understand what steps can be taken to avoid being sued by a credit card company in the first place.

What Can You Do to Avoid Being Sued by a Credit Card Company?

The possibility of a credit card company suing you for unsecured debt is concerning. To avoid being sued, it’s important to understand your rights and obligations when dealing with creditors:

  • If you can afford it, make regular and consistent payments so as not to default on the loan
  • Be aware of state laws that may protect you from aggressive collection tactics such as wage garnishment or harassing phone calls from collectors
  • Keep all communication in writing; this way, should the creditor choose to take legal action against you, there will be evidence of your attempts to resolve the issue
  • Consult with an experienced Mississippi consumer protection lawyer who is familiar with local statutes governing debt collection practices. They may offer advice about how best to negotiate a settlement or other solution before litigation begins

At Ware Law Firm in Mississippi, our team of attorneys has been practicing consumer law since 1998 and is more than prepared to take on your case. Contact us now for a case review.

Author Bio

Consumer Law and Bankruptcy Attorney Serving Magee, Mississippi

Daniel Ware is CEO and Managing Partner of Ware Law Firm, a consumer protection law firm in Magee, MS. With more than 25 years of experience practicing law, he has zealously represented clients in a wide range of legal matters, including identity theft, lemon law, debt collection, and other consumer protection matters.

Daniel received her Juris Doctor from the University of Mississippi School of Law and is a member of the Mississippi Trial Lawyers Association. He has received numerous accolades for her work, including being named among The National Top 100 Trial Lawyers.

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