Can The Credit Card Company Sue You?

Can the credit card company sue you if you do not pay your debt?  The short answer to that question is yes.  When you signed up for your credit card you signed a legal document agreeing to pay the money you owe.  If you go long enough without paying your bill the credit card company not only can sue you, there is a good chance they will sue you.  Don’t think the credit card company will overlook a small outstanding balance.  They have been known to sue for a balance as low as a thousand dollars.

Credit card companies make their money from the interest and fees they charge.  If you only make the bare minimum payment on your bill you will be in debt to the credit card company for many years.  Each month more interest is charged on any unpaid balance.

The longer you avoid paying your bill, the more interest you will owe and the more fees may be charged to your account by the credit card company.  Your credit card company will probably begin charging you late fees as soon as you miss one payment.  If you miss your payments the credit card company will probably raise the interest rate you are charged for the account.  In addition, if you miss your payment the credit card company will call you to remind you that you have a payment due and to make arrangements for you to make the payment.  If you continue to ignore the credit card company your account may be referred to a collection agency.  Their sole purpose is to try and collect the money owed to the credit card company.  Once you are contacted by the collection agency you are usually given two choices.  You can make payments or you can dispute that the charges are yours.  Either option needs to be exercised within thirty days. If you do nothing they will assume the debt is yours and will continue sending letters to you and calling you on the phone.

Eventually, if you ignore the collection agency they may turn your account over to another collection agency.  After a certain length of time, the credit card company may decide to write off the debt if it is very small or they may decide to sue you.

It makes sense to do everything you can to avoid the hassle of dealing with the collection calls and it certainly makes sense to avoid being sued.  If you find yourself in a financial bind and you are unable to make timely payments on your credit card account, contact your credit card company.  It is always easier to deal directly with the credit card company and not with the collection agency.  You may be surprised at how flexible the credit card company can be and how willing they can be to work with you to adjust payments so you can pay them.

Not only can a credit card company sue you if you do not pay your bills, but if you go to court you can incur additional expenses in the form of court costs.  When a judgment is placed against you it will be a serious mark against your credit history for many years.  Whatever you do, do not ignore a credit card bill you cannot pay.  Be honest.  Talk with the credit card company, explain your situation, and try to work something out.