Tips for Handling a Lawsuit Regarding Credit Card Debt

Despite what your debt collector might tell you, litigation is one cost that creditors want to avoid. This can be due to many reasons but the main reason is that in most situations the cost of going to the court is much higher than the amount that needs to be recovered. Hence, a debtor will be sued only if the loan amount is high. Such lawsuits require documentary evidence. When documentary evidence is presented the debtor will find it difficult to show that the debt was not owed by him. In any case if the judgment is made in favor of the creditor or if the suit is not answered then it will make it easier for the creditor to garnish the wages and to attach assets to retrieve the loan amount. consequently under such conditions the following tips will be helpful.

1. Credit counseling: Try to get credit counseling. In dire situation like this sound financial advice and any amount of legal help cannot go amiss. A specialized credit counselor will be able to suggest ways in which you can resolve your debt problem. They can help you device a new payment plan which will fall within your method and will be permissible to your creditors.

2. Bankruptcy: If a debtor files for bankruptcy then the pending law suits for debt collection automatically freeze up. An individual consumer is eligible to file for bankruptcy under chapter 7 and chapter 13 depending upon the current financial condition of the debtor and the position of assets. Both the bankruptcy is popular for a debtor as far as lawsuits are concerned.

3. Negotiate with the creditor: A debtor can avoid bankruptcy if he can make his creditors to renegotiate on the payment plan already after the lawsuit has been filed. Under such a condition the court will suspend the trial as the parties have reached an agreement. However, the debtor should agree to a realistic repayment plan only because a default on the terms of stipulation can cause the creditor to sue again and this time the judgment goes in favor of the creditor.

4. No debt confession: Most debt collection agencies are intimidating and misleading. Most shared thing that they do is to get the debtor to sign on a confession of debt. This confession bypasses the need for any court judgment as this identifying characteristics acts like an admission of guilt and the whole purpose of a lawsuit is to prove if the debtor is the rightful owner of the debt.

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