Consumer Law

Can I Be Taken To Court For Credit Card Debts?

Credit Card Debts

Yes, you can be taken to court for credit card debts. Once your account becomes delinquent, it is inevitable that the creditor will make some attempt to collect that debt.

Do I Need A Lawyer For My Debt Settlement?

It is advisable to have an attorney for your debt settlement. There is a cost benefit analysis that I would recommend a client or a perspective client take a look at. If you have $700 in credit card debt, let’s say, the cost benefit analysis may indicate that you may be better off trying to resolve that on your own. On the other hand, and let’s take a low number, let’s say that you have $3,000 in credit card debt. One of the things that you need to take a look at is let’s say that $3,000 is the principal. What interest, if any, continues to accrue on that credit card debt? In Maryland, if the creditor obtains a judgment on the $3,000 balance due, the legal rate of interest on that judgment is going to begin to accrue at the rate of 10% per year. I find that frequently with original creditors.

I can settle credit card debt one short of a judgment so that the debtor’s credit rating doesn’t get worse as a consequence of a judgment being entered on the debt. The way that we do that is we usually enter into a payment agreement with the creditor that the client feels he or she can afford. More often than not, and every case is different, I can get the creditor to agree to, at a minimum, waive the interest going forward. Sometimes with original creditors, we can get some discount on the principal amount owing. I feel comfortable in saying to most people who would come into the office that the fee that you are going to pay to a knowledgeable and competent attorney in this area is going to be less than it would cost you to resolve the debt on your own, and that includes consent to judgment and interest. A knowledgeable attorney could save you money simply by obtaining a waiver of the interest and avoiding a judgment. Even when you add the attorney’s fees back in, you may wind up paying less to resolve that debt with the assistance of an attorney then you would attempting to do it on your own. That’s even truer with a case where the plaintiff has purchased the debt from the original creditor. Remember, the debt buyer has not paid full value for that claim.

Let’s say that you have a $10,000 credit card debt. The debt buyer in fact may have paid $50 to acquire that claim. Typically in Maryland what happens is the debt buyer sends you a copy of the bill of sale and some information related to your account. If you are served with that type of the lawsuit, it is, in my view, crucial to have an attorney who knows how to respond and what to request in that response. More often than not, you may have a defense to those cases which should be looked at. If you want to settle, my experience has been that most of those creditors will offer a substantial discount to get the case resolved. They’ll do it on a payment plan. The amount of money that is deducted from the principal amount of the settlement is going to be far less than the cost of acquiring the assistance of an attorney to represent you in such a case.

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