Maintaining a healthy balance between using a credit card and paying off debt is key to good financial management, but what if you fail in this endeavor? Can a credit card company sue you? Can San Diego credit repair companies help?
Legal Action for Non-Payment of Debts
A credit card company can sue you if you fail to pay your debts. When you open a line of credit, such as a credit card or loan, you enter into an agreement with the lender which states that you will pay them every month according to specific terms. This includes interest, fees, and any other charges associated with the loan. Failure to pay what is owed when it is due puts you in breach of contract, and the lender has the right to take legal action against you in order to recover their money.
What Happens When Debtors Don’t Pay?
When attempting to collect on delinquent accounts, credit card companies follow the same legal procedures as other creditors. They must first send a notice called a ‘Demand for Payment,’ which informs the debtor that they are delinquent in payment and that further action may be taken if the payment is not made.
This notice gives the debtor an opportunity to contact their creditor to work out an installment plan or debt settlement. If this doesn’t happen, the credit card company has two choices: they can choose to write off the debt or file a lawsuit seeking payment from the debtor.
What Claims Will Be Made Against the Defendant?
When it comes to litigation, whether it is for small amounts or larger sums of money, each claim must meet certain requirements before a court will consider it valid. For example, claims involving consumer debts must include proper documentation, such as bills of sale, contracts between parties, proof of services rendered, and proof of payments received.
If accepted by the court and a creditor proceeds with legal action, the credit card company will likely sue you for the full amount plus interest and fees incurred until that point. This could be a significant sum, which could prove daunting when trying to settle out of court. If it proceeds through the legal process, it could lead to wage garnishment and other financial penalties by the courts.
Can a Credit Card Company Sue in California?
In California, if you have an unpaid credit card balance and make no effort to pay it back, the issuer can file a suit against you. It’s important to note that the timeline for this type of legal action in California is usually quite lengthy; however, this does not mean that creditors do not have any recourse when it comes to collecting overdue payments.
Depending on the situation, there are certain measures credit card companies can take, such as making claims against real estate owned by the debtor, freezing bank accounts linked to the debt, and garnishing wages from employers who employ the debtor. In addition, under California law, if a creditor obtains a judgment against you for an unpaid debt, they can seize certain personal property without having to issue a notice of their intention beforehand–this includes household furnishings and other tangible items that may be sold off in order to help satisfy your outstanding balance.
In Conclusion
The potential consequences of not paying your debt are serious. Although many people only associate credit cards with convenience, creditors have rights under the law. Like any other credit company, they have the right to take legal action against non-paying customers to retrieve outstanding debts.
If you have looked into what credit score you need to purchase a home in San Diego, you should also know it needs to be sufficiently high to satisfy lenders. Be sure to adhere to the financial terms of your contract, and don’t accumulate too much debt to avoid financial difficulties down the line. If you need guidance in this process, The Phenix Group is happy to help!