If your credit card company sues you, you’ll need to decide if it is worth paying for an attorney to help you. In many cases, it is. An attorney can help you raise any defenses you have, negotiate with the creditor to settle the debt, or simply inform you of your rights and responsibilities in the matter.
Below are some situations where you should consider hiring, or at least consulting with, an attorney if your credit card company files a lawsuit against you.
If you believe you have a defense to the lawsuit, you may need an attorney to help you raise the defense in court. For example, some defenses that may require the assistance of an attorney include:
The statute of limitations has passed. Under state law, a creditor or debt collector only gets a certain amount of time to sue you for an unpaid debt. This is called the statute of limitations. The time limit varies from state to state, but it is generally from three to six years. (Check Nolo’s chart of Statutes of Limitations in All 50 States to find out the statute of limitations in your state or the state designated in the credit card contract’s choice of law section. Learn more about choice of law provisions in credit card agreements.)
If the statute of limitations has passed, you have to assert this defense by responding to the lawsuit and providing supporting evidence to get the case dismissed. An attorney can help you with this. (Learn more in Nolo’s article Time-Barred Debts: When Collectors Cannot Sue You for Unpaid Debts.)
You aren’t the person who owes the debt. Credit card companies often sell unpaid debts to a debt collector and that is the party that eventually files the lawsuit. Debt collectors sometimes sue the wrong person. If you have a name that is the same or similar to the person who actual owes the debt, you can raise the defense of mistaken identity. To do this you’ll need to demand proof from the debt collector that you are the person who owes the debt. This can be tricky and an attorney can assist you in making the debt collector produce the original documents so that you can show that your signature, social security number, and other personal information doesn’t match that of the actual debtor.
The party suing you can’t prove it owns the debt. If the party that files the lawsuit is not the original creditor, it must prove it owns the debt. This means that it must include appropriate documentation in its lawsuit showing that it bought your debt from the original creditor (or from another entity that purchased the debt from the original creditor). Otherwise you may be able assert lack of standing (meaning, the party suing you doesn't have the right to collect the debt) as a defense. An attorney can help you figure out if this defense is available in your situation.
An attorney may also be able to spot potential defenses that you haven’t considered. (Learn more about different defenses in Nolo’s article Defenses to Credit Card Debt Lawsuits.)
Even if you think you don’t have a defense to the suit, you may want to consult with an attorney to help you understand what you’re facing and explain what could happen if you lose the suit.
For example, if you don’t respond to the suit, the court generally will enter a judgment against you for the amount the creditor claims you owe them. Then the creditor can get this amount from you by doing such things as garnishing your wages or directing your bank to turn over funds from your account to pay the debt. (Learn more about how judgment creditors can collect debts.) An attorney can explain the specifics about what can happen in your situation.
You may want to try to negotiate a settlement of the debt (for example, by paying less than you owe in one lump sum), but dealing with a creditor or debt collector can be frustrating and time consuming. An attorney can negotiate with the creditor or debt collector on your behalf to reduce the amount you owe and settle the suit. (Learn more about using a lawyer to negotiate with creditors.)
If you are unsure of what to say to a creditor or debt collector, you could inadvertently hurt your situation. For example, if the statute of limitations has passed, you could restart it by:
An attorney can advise you about what you should and should not say to a creditor or debt collector. And, if you decide to hire the attorney to represent you in the matter, he or she can deal with all communication to and from the creditor or debt collector.
If you can’t afford an attorney, you may be able to get low-cost or free help from a legal aid program or clinic that provides legal assistance to low-income individuals and families. (You can find a list of various legal aid programs on the Legal Service Corporation's website.)
Even if you don't qualify for legal services help and cannot afford a private attorney, it may be worth paying an attorney for an hour of legal advice. For example, the attorney may confirm that you don't have any good defenses, provide tips on negotiating with the credit card company, or discuss other options you may have.