Will a Creditor Sue?
- Credit card companies won't sue if you miss one payment or send a payment late. But if 60 days or more pass without payment, your creditor may send your account to its collections department and consider taking legal action to recover the funds, says Bankrate. Creditors send letters threatening a lawsuit to encourage a payment and then sue if you ignore their correspondence or telephone calls.
- Rather than sue for missed payments, your creditor may turn your account over to a collection agency, which will aggressively seek payment. At this point, the original creditor likely charged off the account and sold the debt to the collection agency. Collection agencies can send letters, telephone and even file their own lawsuits to collect unpaid debt.
- Whether sued by your original creditor or a collection agency, you face severe consequences. The court is likely side with the creditor or collection agency; and then order you to pay the outstanding balance plus any interest and court costs. If you are unable to pay. The judge orders a judgment, which will appear on your credit report for seven years.
- Communication can help you avoid being sued by your creditor. Financial hardships make it difficult for some people to keep up with their payments. But instead of talking to creditors and establishing a new repayment plan, some people ignore ignore the debt. Poor communication can prompt a creditor to send the account to collections or take legal action. Be upfront with creditors and explain the reasons for missing your payments. Ask for payment assistance such as a lower payment or a deferment or forbearance.