Credit Card Debt Lawsuit – 5 Things You Must Know Before Settlement
When consumers are forced to fall behind on their maxed out credit card bills in order to pay for their necessities, one of their biggest fears is the possibility of receiving a debt collection lawsuit for their unpaid credit card debts. For many, the fear is so strong that they will unwisely drain all of their savings and retirement accounts in an attempt to fight a losing battle maintaining minimum payments.
Often times, consumers facing this situation will explore the option of negotiating their debts down to a lower amount, in an attempt to settle and satisfy the obligation. However, even when attempting to settle a debt, the threat of a potential Credit Card Debt Lawsuit still remains.
Here are the 5 things you should know about debt settlement and your potential to receive a credit card debt lawsuit.
1. A debt settlement company cannot guarantee to stop a lawsuit
There are certainly things that an experienced debt settlement company can do to give their clients a better chance at avoiding a credit card lawsuit or extending the time before a lawsuit gets filed, but if a creditor wants to sue, there is nothing that anyone can do to stop it.
Enrolling into a debt settlement program will not by itself decrease the likelihood that you will be sued. In fact, many debt settlement programs operate in a way that make it more likely you will be sued, so consumers must be very careful when choosing a debt settlement program.
2. Some creditors are more aggressive with credit card debt lawsuits
All creditors are different and taking a one size fits all approach is not a good idea. Certain creditors are more aggressive with issuing lawsuits on unpaid accounts as a matter of policy. Unfortunately these policies can change and what a specific bank is doing right now, might be very different than what they will be doing 6 months or a year from now.
Focusing on settling with the more litigious banks first will lesson the chances of you getting sued before you can successfully resolve and settle all of your outstanding accounts.
3. The sooner you settle, the less likely you are to be sued
This is self explanatory but unfortunately there are many debt settlement programs that love to pitch low monthly payments over 5 and 6 year periods simply to make a sale. There is no question that resolving your outstanding debts quicker will dramatically lower the chances of you receiving a debt collection lawsuit.
The longer you take to save the money and settle, the more your chances increase that a creditor will become impatient and send the account to litigation to try and collect what is owed. If it will take you 5 or 6 years to save the money to settle your debts, then realistically settlement is not likely the best option for you.
4. Do not send cease communication letters to all of your creditors
One of the biggest mistakes that many debt settlement companies make is sending cease communication letters out to all of the creditors of a new client. Many creditors dislike receiving these as you can imagine and will potentially mark them as an early out referral to the legal department.
Remember all creditors are different, and blindly firing off cease communication letters will get you sued more often than if you simply did nothing.
5. Your chances of getting sued, if doing things right, is very low
So just what are your chances of getting sued if you are attempting to settle your debt with a creditor? As mentioned above, creditors change policy and individual circumstances vary among consumers. Saying you only have a 5% or 10% chance of getting sued is actually pretty meaningless, especially if your circumstances are such that you are very likely to be sued.
Rather then give you a meaningless percentage, let’s look at the real numbers for clients of New Era Debt Solutions. New Era publishes its numbers for anyone to see. That is not something you will find with most debt settlement programs.
When you follow that link you will see that only 6% of New Era’s clients have experienced any type of legal activity. If court action has a potential to occur, New Era continues to negotiate on behalf of its clients and less than 1% of clients have ever experienced escalated legal activity such as a wage garnishment.
Given that New Era has helped 1,000′s of clients, you can see that when things are done the right way and a debt settlement company only accepts consumers who are properly qualified for the program, the chances of receiving a credit card debt lawsuit are actually quite low.
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