If your credit card company sues you, you’ll need to decide if it's worth paying an attorney to help you. In most cases, it is. Studies have shown that debtors with legal representation in a debt collection suit are much more likely to get a better outcome, like winning their case outright or reaching a mutually agreed settlement with the plaintiff, than those who don't. A lawyer can raise any defenses you have in court, negotiate with the creditor to settle the debt, and inform you of your rights and responsibilities.
Below are some situations where you should consider hiring or 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'll probably need an attorney to help you raise that defense in court. For example, some defenses that could require the assistance of an attorney include:
An attorney can also point out, and raise in court, defenses that you haven’t considered.
Even if you think you don’t have a defense to the lawsuit, you might want to consult with an attorney to help you understand what you’re facing and explain what could happen if you lose the suit. If you don’t respond to the suit, the court will most likely enter a judgment against you for the amount the creditor claims you owe. Courts routinely order debtors to pay accrued interest plus court fees, which can exceed the original amount owed. Other harmful consequences can include garnishment of wages, directing your bank to turn over funds from your account, and the seizure of personal property. An attorney can explain the specifics about what might happen in your situation.
You might want to try to negotiate a settlement of the debt, like by offering to pay 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.
If you're 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 saying or signing something acknowledging that the debt is valid, or agreeing that you owe the money. You could also revive the statute of limitations if you make a payment on the old debt.
An attorney can advise you about what you should and should not say (or do) in regards to an old debt. And, if you decide to hire the attorney to represent you in the matter, the lawyer can deal with all communication to and from the creditor or debt collector.
If you can’t afford an attorney, you might 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.
If you don't qualify for legal services help and can't afford to hire an attorney to represent you throughout the suit, it might be worth paying a lawyer for an hour of legal advice. The attorney might be able to confirm that you don't have any good defenses, provide tips on negotiating with the credit card company, and tell you about other options you could have.