If you get sued by your credit card company do these 3 things immediately

By Dana George

Reviewed by Jill Cornfield

Jun 27, 2024

Read time: 5 min

Young woman facing financial difficulties

Key takeaways:

  • Being sued by a credit card company may not be pleasant, but it's survivable—as long as you take action.

  • Negotiating a settlement with your creditor is an option that benefits both parties.

  • A good debt resolution program can act as your wingperson, ensuring you are treated fairly.

If you're already dealing with the stress of credit card debt, the last thing you need is a lawsuit filed by your credit card company. As intimidating as being served a lawsuit can be, there's no reason to panic. Taking these three steps immediately will move you closer to closure. 

1. Respond by the required deadline

Imagine this: You've just arrived home from work and sit down to sort through the mail. Inside one plain-looking envelope is a summons, a notification that you’re being sued by your credit card company for nonpayment. At first, you're not sure if it's legitimate because you thought all official court summons are hand-delivered. Once you realize you're really being sued, your thoughts spin. If you didn't have the money you needed to pay your credit card bill when it was due, are you actually expected to come up with the money now? 

The first thing to do is take a deep breath. As long as you cooperate with the summons and are willing to negotiate with your creditor, you can get through this. 

You read the lawsuit carefully, ensuring that the debt is yours. Whether you recognize the debt or not, you sign the form included with the summons, acknowledging that it was received. Signing the summons doesn't indicate that you agree with the debt, only that you know the lawsuit exists. If the debt is not yours, you'll have a chance to prove your case.

There is no benefit to ignoring a summons, no matter how tempting it may be to just set it aside. The Consumer Financial Protection Bureau (CFPB) explains what can happen if you don’t respond. 

  • The court could issue a judgment against you, sometimes called a default judgment.

  • If the court issues a default judgment, it's likely that it will be entered against you in the amount the credit card company says you owe, whether that's correct or not. 

  • In addition to the outstanding debt, you'll be hit with additional fees and interest. 

  • Depending on your state laws, the creditor may be able to garnish your wages, place a lien against your property, and make a move to freeze funds in your bank account. 

As scary as each of those possibilities may sound, there's no reason to let things get that far. You are within your power to work things out and get on with your life. 

2. Speak with an attorney

We realize that recommending speaking with an attorney may sound ridiculous. After all, if you don't have money to pay your credit card bill, how are you supposed to pay for a lawyer? Here are some low-cost options:

  • Legal aid offices

  • An attorney who offers free services or services at a reduced fee (they do exist)

  • If you're a military member, contact your local JAG office for assistance.

While it's possible to go it alone, an experienced attorney can help you understand your federal and state protections, and any laws put in place to ensure you're treated fairly. If you can't find an attorney or can't afford one, it's not a dealbreaker. These moves can help make the road to resolution a little smoother:

  • Respond to the summons by the required date.

  • Know your rights by looking up the rules surrounding the Fair Debt Collection Practices Act. This act prohibits debt collectors from using unfair, abusive, or deceptive practices to collect a debt. 

  • Remain open to negotiating a settlement.

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3. Work out a solution

Getting sued does not mean you're out of options, and it's no reason to get stressed out or risk your health. You can still try to settle a debt after a lawsuit has been filed. You simply have to remain open to a compromise. Here's what you need to know:

  • It's not too late. Credit card companies don't close the door to debt negotiation just because a lawsuit has been filed. After all, credit card debt is unsecured revolving debt, meaning there is nothing the creditor can repossess and sell to offset its losses. It's in the credit card company's best interest to settle and get something rather than nothing. 

  • Your budget will determine what you can bring to the table. Before entering into negotiations, look at your monthly budget to determine two things: Whether you have a lump sum of money you can offer to settle the debt or how much you can afford to make in monthly payments toward the debt. Once you know how much money you have to work with, you're ready to negotiate a settlement.

  • The credit card company may meet you halfway. Ideally, your credit card company will waive or reduce your minimum monthly payment, lower your interest rate, and forgive past late fees. Each of these actions can help you pay off the credit card balance faster. 

  • Credit card representatives are people, too. Treating those you speak with respectfully and honestly explaining your circumstances can go a long way toward easing your situation. If you began having trouble paying your credit card due to an illness, job loss, or some other financial hardship, let the credit card company know. They may recommend a hardship program that works for you. 

Finally, if you're currently enrolled in a debt resolution program, you may already have a solution standing by. Some debt resolution companies may provide legal assistance as part of their program. 

At Achieve, we aren’t lawyers or licensed to practice law, but if you are enrolled in our debt resolution program, we’re committed to ensuring that your debt can still be negotiated if any enrolled accounts go into litigation. Our partner network of attorneys, the Legal Partner Network, specializes in negotiating debts. If any enrolled creditor files a lawsuit against a member, they may engage a Legal Partner Network attorney who'll try to negotiate a settlement with the creditor.

While the debt resolution lawyer won't represent a member in court or file paperwork, they will try to get the creditor to agree to a settlement. 

Debt (and life) happens, but when it does, it's good to know you have options.

Dana George

Dana is an Achieve writer. She has been covering breaking financial news for nearly 30 years and is most interested in how financial news impacts everyday people. Dana is a personal loan, insurance, and brokerage expert for The Motley Fool.

Jill Cornfield

Jill is a personal finance editor at Achieve. For more than 10 years, she has been writing and editing helpful content on everything that touches a person’s finances, from Medicare to retirement plan rollovers to creating a spending budget.

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