Try To Settle With The Credit Card Company
Lawyers dont work for free, and court cases cost everybody money. So the credit card company has some incentive to avoid going to trial. The company might initially put up a fight, but the attending supervisor likely will be interested in simply recovering as much of the debt as possible.
Offer to pay a portion of the debt. Ask the company to forgive the rest and cancel the lawsuit. Also ask to be held blameless, so your credit score wont be harmed. If the company agrees and the suit is dropped, be sure to get written notification. You dont want the company to claim your settlement was actually a payment and then have it sue all over again.
Also, carefully examine the debt. If its inflated with penalties and late fees, those can be negotiated away. Review your contract to determine what fees can be legitimately added for late payments. If the debt seems littered with baseless fees, speak up! Theres an old saying that may apply: You have as much power as you want to take.
Learn Your Options If Sued For Credit Card Debt
Debt has consequences, some of which will surprise the average American.
For example, if you default on credit card debt the major consequence could be a lawsuit.
Hold on. Can a credit card company sue you? Yes, it can. And pushed into extreme circumstances, it will. In a heartbeat.
Which leads to the bigger question: What to do if you are sued by a card company?
First, never ignore calls. That just makes things worse and paints you as negligent. Study the complaint carefully for accuracy. Try to negotiate a settlement, if possible.
Heres the bottom line: Credit cards are not play toys that allow mass purchases on the Home Shopping Network.
Most importantly, make sure the lawsuit is accurate. Sometimes, your account is sold to a debt collection agency, which specializes in harassment and strong-armed tactics. The amount they say you owe? It might be incorrect.
If it gets to this stage, be ready for a fight, which may include hiring a lawyer. Its never pleasant when a giant financial institution sets its sights on you, but you do have rights.
But when signing up for the card, you accepted those terms, whether you read them or not. Somewhere in that sea of legalese, it spelled out the conditions if you defaulted.
Falling behind on credit cards is not uncommon. According to the Federal Reserve, U.S. credit card debt stood at $770 billion in early 2021.
Heres a step-by-step action plan on what to do if you are sued by a credit card company.
Repay Through A Debt Management Plan
A DMP is a repayment arrangement through a credit counselling agency. The credit counsellor may be able to stop or reduce the future interest charges, which means your balances wont continue to grow. However, you must commit to repay the entire balance owing at the time you sign up. A credit counsellor cannot negotiate a debt settlement for you.
If you need help making a settlement offer, consider talking with a Licensed Insolvency Trustee.
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Court Rulings May Take Precedence
To construct the chart above, CreditCards.com examined statutes and judicial opinions and consulted legal experts to cover all 50 states and the District of Columbia. In most states, the statute of limitation is clear. In some, however, we could find no definitive answer because of ambiguities in state law or conflicts between the law and court rulings.
The uncertainty over when credit card debt expires arises because state laws governing contracts are interpreted by the courts when they are applied to individual circumstances, and those interpretations may change over time.
That was the case in Georgia in January 2008, when a Georgia Court of Appeals ruled that the statute of limitations on an unpaid credit card debt was six years. The Georgia code sets the limit on open-ended accounts at four years, but the appeals court applied the law for written contracts to card debt in this case. Another 2008 Court of Appeals ruling affirmed the Hill ruling and settled the law in the state, according to the Georgia Department of Law.
Jpmorgan Chase Resumes Filing Lawsuits On Unpaid Credit Card Debt Despite Reputation Of Unethical Collection Practices
Posted by | Jan 10, 2022 | 0 Comments
Everyone knows the story big financial corporation gets caught practicing crooked business and gets a slap on the wrist from the consumer protection watchdogs. After being sentenced to a time-out, the corporation, feeling no remorse and having learned nothing, promptly resumes the same profitable, yet shady, business that landed them in hot water in the first place.
Today, the villain in that well-known story is JPMorgan Chase Bank.
Once upon a time, in 2011 to be exact, Chase abruptly stopped its practice of pursing legal action against customers who had failed to make payments on their credit card accounts. The cease in lawsuits was the result of regulators blowing the whistle and exposing how the company had been filing tens of thousands of actions that often exaggerated the amount of money the consumer owed. Often, the only supporting documentation that established grounds for the lawsuit was an affidavit swearing the truth of Chase’s claims that was signed by a handful of low-level employees with little knowledge of the actual details of the consumer’s account. This practice of signing off on paperwork without reviewing any evidence is known as robo-signing and often contributes to inaccurate claims of debts owed.
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Respond To The Summons
Once youre served, you have a set amount of time typically 20 to 30 days to prepare and file a response.
A failure to prepare and file a response is arguably the worst thing you can do because the creditor automatically wins a default judgment against you and, in some states, can garnish your wages or bank account.
Unfortunately for consumers, default judgments are all too common. In the last decade, theyve accounted for more than 70% of debt collection lawsuit outcomes, the Pew study found.When you respond to a lawsuit, you agree or disagree with the allegations that have been brought against you and raise any defenses you have.
See related: What happens if you ignore debt collectors?
Strong Record Of Success In Connecticut
The Woods Law Firm, LLC aggressively defends lawsuits filed in Connecticut by credit card companies. Put our experience to work for you. Our record speaks for itself:
We provide personalized representation to each of our clients throughout Connecticut who needs strong legal guidance handling a case. We can pursue a negotiated settlement with creditors and aggressively defend your rights in court. During a free case evaluation, we can sit down with you and develop a personalized strategy based on the facts of your case.
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Consider A Consumer Proposal
If you struggle to repay a lot of credit card debt or have other unsecured debt, a consumer proposal can provide needed debt relief.
Governed under the Bankruptcy & Insolvency Act, a consumer proposal provides several benefits:
- A consumer proposal stops various forms of creditor actions, including collection calls and wage garnishments.
- It allows you to repay back less than the amount you owe.
- In addition to eliminating your credit card debt, it can help you deal with monies owed to other creditors, including CRA, payday loans and certain student loans.
- Most proposals are completed in 3 to 5 years . Lump sum settlements are also possible.
- It gives you the power to negotiate payment terms you can afford.
- A consumer proposal is binding on all creditors.
Chase Stops Suits Against Credit
Revelations last year that many of the nation’s biggest banks were illegally evicting homeowners by “robo-signing” foreclosure documents triggered a flurry of federal and state investigations. Now, as American Banker reports, the scandal may be widening to another common type of consumer debt — credit cards:
JPMorgan Chase & Co. has quietly ceased filing lawsuits to collect consumer debts around the nation, dismissing in-house attorneys and virtually shutting down a collections machine that as recently as nine months ago was racking up hundreds of millions of dollars in monthly judgments….
Robo-signing, or the high-volume production of signed legal documents, has been a key element of the governmental and media foreclosure reviews. Chase’s current pullback raises at least the possibility that at least some banks may have documentation problems in other business lines.
JPMorgan Chase isn’t only abandoning efforts to hunt down outstanding credit-card payments — it’s also firing bank employees involved in recovering the debt. American Banker, a daily trade publication that follows the financial industry, says the Chase last year dismissed “numerous regional collections teams.”
f Chase is willing to give up anything like $100 million per quarter by effectively shutting down its collections operation, one can’t help but suspect that the legal or reputational risk of keeping that operation in place was truly enormous.
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How Can I Clear My Debt Canada
Collectors Use The Court System To Maximize Profits
Many people think debt buyers prefer to avoid lawsuits to collect old credit card debts because it requires them to pay lawyers and incur costs of litigation. If this were true, however, credit card lawsuits would be far less common than is the case. In fact, there were nearly 200,000 credit card collection lawsuits filed in New York in 2011 alone. Moreover, a report by ProPublica found that these lawsuits accounted for 48% of the court judgments filed in New Jersey in 2011.
Those consequences can include wage garnishment, funds seized from bank accounts, liens on property, and even the forced sale of automobiles and other assets to pay the debt. Whats worse is that the judgment continues to accrue interest, rising steadily over the years as the balance remains unpaid.
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Settle Credit Card Debt With Chase Bank
Standard and Hardship Plans
According to data provided by Chase, they have helped more than 700,000 customers achieve debt relief with debt management plans along with general assistance.
- Under the standard Call to Action DMP, the interest rate is lowered to 6 percent, which is a considerable reduction from the normal double-digit percentage, while monthly payments are 2 percent of the outstanding balance.
- Chases hardship DMP offers even more lenient terms. Interest rates can be cut as low as 2 percent, and monthly payments are only 1.75 percent of the outstanding balance.
The goal of the DMPs is to give cardholders the flexibility to manage household expenses along with credit card debt along with a chance to start building a savings account for emergencies.
Other Debt Management Options
Everyones situation is different, so Chase also has a number of other options to help customers get relief from debt with a solution that best meets their needs. Some of these options include:
- Waiving late and over-limit fees
- Restructuring debt balance
- Extending the length of repayment terms
- Reducing interest rates
In exchange for concessions, the customer is expected to continue making timely payments in the agreed-upon amount.
Debt Settlement Programs
Disputing A Negative Chase Credit Report Item With The Help Of Donotpay
If Chase Bank has reported a negative item to the three bureaus that you want to dispute, DoNotPay can help.
If you need help with negative items from Chase that appear on your credit report, you can take the following simple steps to get help from DoNotPay:
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If Your Payment Is More Than 4 Months Late
As you continue to miss credit card payments, these will be added to your credit report. Your account will be marked as R3 for 2 months late, R4 for 3 months late etc., up to R5.
Your creditor has the right to close your account, which means you no longer have access to this credit card to make purchases. Closed accounts on your report will also increase your utilization rate, which will lower your credit score.
If you miss a payment by more than 120 days, your creditor may label your account as a charge-off. A charge-off means your creditor has written off the account as a bad debt. At this time, your account will be marked as an R9. Accounts in collection or in charge-off severely harm your score and are an indication to future lenders that you may not be a good credit risk.
If you have accounts this far in arrears, you may find it difficult to obtain new credit.
At this stage, your creditor may also transfer or sell the debt to a collection agency.
Is There Debt Forgiveness In Canada
In Canada, there is only one program that is formal and legal in effect: a consumer proposal for debt forgiveness. The Bankruptcy & Insolvency Act governs debt settlement programs for consumers, with Licensed Insolvency Trustees administering them. You can eliminate many unsecured debt categories, including your payday loan debt.
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Statistics Show Most People Do Not Respond To Credit Card Lawsuits
There are many reasons people will ignore a lawsuit. Regardless of the reason, studies suggest that roughly 90% of lawsuits on debts like credit cards end up with a default judgment against the consumer, if payment arrangements are not made. Most of these defaults are because there was no reply to the lawsuit.
If your historical data shows that filing a lawsuit gets you paid on some accounts, and gets you default judgments on the vast majority of collection files you dont get paid on, why not file a bunch of suits? If I were in the game and had data that showed collection common sense meant I was more profitable and paid better for chasing down low balance debts in the court, I would have to stay competitive and roll with it.
Tips On Settling Credit Card Debt Before Going To Court
If you are being sued over an old debt, negotiating a debt settlement is a smart move. A lot of people dont realize that debt settlement is one of the best debt relief options out there, and working with an attorney to create a debt settlement plan is often much better than going to court over credit card debt.
Heres how to settle credit card debt before going to court:
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If You Have Council Tax Arrears
If youre liable for a council tax bill and youve missed a payment its important you contact your local authority as soon as possible. Get more help with dealing with council tax arrears.
Youll usually have to pay the council tax for the property you live in. Its worth checking if the owner of the property is liable to pay, even if they dont live there. For example, the owner will be liable if everyone living in the house is:
- living in their own, separate parts of the building
- there temporarily, for example in some hostels
- an asylum seeker
If you live with other people, for example another tenant or a partner, youll usually be jointly liable for paying the council tax and any arrears.
If you’re jointly liable, each person is responsible for the whole bill, not just part of it. This means if someone moves out without paying, youll still be liable for all of the bill. The council can ask any of the liable people to pay the full amount of the bill.
What Debt Collectors Can & Cannot Do
If you are dealing with a debt collector, you have protections under the law. A debt collector must not mislead, harass, coerce or act unconscionably towards you. If a debt collector contacts you about a legitimate debt, be cooperative but also expect to be treated professionally.
The ACCC and ASIC administer the Commonwealth laws that protect people from undue harassment and illegal debt collection conduct. You can report unacceptable behaviour that is serious or ongoing to the ACCC or ASIC using information provided at the end of the page.
For debts relating to loans, credit cards, or other financial services, contact ASIC.
For debts relating to goods and services such as phone or utility bills, tradespeople or other service providers, contact the ACCC.
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Does Paying Off Credit Card Debt Raise Your Credit Score
You may be able to improve your credit score if you pay off a large chunk of your credit card balances. Even if you don’t reduce your aggregate utilization rate down to less than 30%, getting it down to as close to that as possible will have a positive impact. Any effort to pay off more than the minimum payment on your cards each month might result in an incremental improvement of your credit score as long as you’re doing all the other things that positively impact your score, like paying bills on time.