Debt Collection – What Happens In Court?

If the borrower is late on credit card payments and ignored the credit card company’s attempts to recover, the time may be ripe for the company to knock the doors of the court. Although credit card issuers hesitate taking the borrower to the court because of the fear of additional costs, there are definite chances that they may take this approach. There are probabilities that a credit card issuer may summon the borrower to the court even if the person has not used his card for several years.

A credit card issuer will take some time to assess the costs and procedure involved in filing a case. The company will first hire an attorney who will prepare the papers and have them sent to the borrower. Then, it finalizes the date on which the individual has to appear in the court. The credit card issuer has to pay money out its pocket for registration as well as case filing. Besides, there is still uncertainty that the lender will win the case. Therefore, unless a lender is sure of victory, it will not attempt to file a court case.

As a borrower, one can either clear the payment, which permanently terminates the lawsuit, or appear for the hearing. The borrower may choose to hire an attorney or fight the case himself. He has the liberty to tell the court that he did not receive the papers from the company or not appear in the court at all. However, the consequences of such actions can be fatal, as the credit card issuer will automatically win the case ex parte. Although regulations of different states vary, in most cases the issuer can impose a lien on your house or take away a part of your wage. Only one creditor is allowed to do that at a time and they cannot wipe out your account completely.

If you still consider the way of the court as a borrower, the paperwork and all the minute details of the procedure will be sent to you. You can frame your arguments based on the charges that a credit company poses. But, it is still advisable that you sort the case with the issuer before opting for legal procedure.

Source: Money Matters

Debt Collection - What happens in court?

Thank you for sharing that information!

"If you still consider the way of the court as a borrower, the paperwork and all the minute details of the procedure will be sent to you."

Here's a follow up question: Do creditors agree to a settlement? Do creditors settle?