Unlike the creditor of a secured debt, like a mortgage, who requires collateral for the debt that it can sell it to satisfy the debt, the creditor of an unsecured debt, like a credit card, can only file a lawsuit against you personally as recourse to recover an unpaid debt.
What happens if you ignore collection agency?
Ignoring or avoiding the debt collector may cause the debt collector to use other methods to try to collect the debt, including a lawsuit against you. If you are unable to come to an agreement with a debt collector, you may want to contact an attorney who can provide you with legal advice about your situation.
If a debt goes unpaid and you’ve made no plans to repay it, your credit card company may sue you in civil court for the balance, hoping a judge will order you to pay.
How much can a credit card company sue for?
Every credit card company has its policy regarding the threshold. While some say that credit card companies won’t sue for debts below $1,000, the decision still depends on certain factors like company size, legal expenses, and recoverability of the debt.
Can a credit card company sell a delinquent account?
Original creditors often sell delinquent accounts to debt collectors if their own collection efforts fail. Once the agency takes ownership of the debt, it has the same rights to seek a judgment against you as the credit card company did.
What happens if you ignore your credit card debt?
Ignore your credit card debt long enough, and your credit card company may sell your account to a collection agency or sue you in civil court for the balance. While it’s best to try to work with your credit card company before a lawsuit is filed, it’s also important to know what to expect if you receive a summons and how you can respond to it.
What to do if a credit card company threatens a lawsuit?
If you get a notice from a credit card company threatening a lawsuit, take it seriously. Companies aren’t allowed to bring up the prospect of court action unless it’s under serious consideration. Don’t fail to respond to a summons, as this could result in a judgment being made against you.
