Credit Card Lawsuits, Part III: Should I Respond?

Briefly reviewing what I have discussed earlier regarding credit card lawsuits...

You have been served with a credit card lawsuit by the sheriff. From that day, you have 20 days to respond, and the court will automatically grant you 10 more days when those 20 days expire. Your response needs to be a formal answer to the complaint filed in the relevant court. The answer must exert a defense and be in the proper form.

All of this raises the next important question... should you actually respond?

Just because you can respond doesn't mean that you should go through the time and effort, or pay an attorney to do so.

If the debt is not your debt, or if it was procured without your knowledge through fraud, you most certainly should respond. A consumer protection attorney should have no problem getting the complaint dismissed. Failing to respond could lead to a judgment being entered against you despite your innocence. A judgment could destroy your credit.

If you have not made a payment on the underlying debt or used the credit in question in 4 or more years, you should consult and an experienced lawyer to see if you can raise a statue of limitation defense (NOTE: this is an affirmative defense, meaning you must respond to the complaint and raise the defense or you will lose!). You may also want to respond if you suspect the creditor no longer possesses the original documentation for the loan, or if it was not transferred properly. These provide effective defenses to the complaint filed against you, and give a good shot at succeeding in court. It will be worth your money to hire an attorney.

However, if none of these circumstances apply, and you suspect the underlying debt is valid, you may decide to NOT respond. Not responding to a legal action is normally not a very good idea. But, it may not be necessary if you are filing (or preparing to file) a bankruptcy.

The bankruptcy automatic stay will stop any credit card lawsuit in its tracks. Filing a bankruptcy prevents creditors from filing a suit against you, proceeding with a suit already filed, or executing on a suit that has already become a judgment. So, if responding to the complaint is not possible, or feasible, or likely to succeed, you should be considering filing bankruptcy to enjoy the protections it offers.

Finally, an experienced consumer protection or bankruptcy attorney may be able to help you negotiate a settlement to stop the lawsuit from proceeding. A settlement agreement will stop the creditor from proceeding with the lawsuit as long as you are paying on the debt. Both options of bankruptcy and debt settlement will be discussed in a later post.

Whether or not to respond to a credit card lawsuit hinges on a couple factors discussed above... whether you have a reasonable chance to succeed, and whether bankruptcy or a negotiated settlement are legitimate options. Contact us and speak to an experienced Pittsburgh bankruptcy lawyer to learn your options and defend your rights.

I'll next discuss what happens when you do not respond to a credit card lawsuit and a default judgment is entered against you.