Sued by a Debt Collector? Here's What to Do

Getting Sued by a Debt Collector

Getting sued by a debt collector, lender, or credit card company?

We recently had an interesting question from a person about being sued for an old credit card debt.

Question:
I am being sued by a credit card company for a debt that should be coming off my credit reports next year, what should I do?

Answer:
Every state has a statute of limitations (SOL) that limits how long a debt collector can sue for a debt. Here is a list of states and the amount of time a debt collector has to sue based on each state’s statute of limitation.

The statute of limitations (SOL) starts at the date of the last payment. If you had a credit card that was charged-off in November 2020, the last payment was likely received sometime around April 2020 because the Uniform Commercial Code (UCC) states that revolving credit must be charged-off after 6 months of non payment.

But, just because your debt has passed the statute of limitations doesn’t mean that you should ignore any court notices.

NOTE 1:
Even if a debt has exceeded the statute of limitations (SOL), lenders can still file lawsuits against consumers and get court judgments if the consumer does not show up or fight the lawsuit. It is the consumer’s responsibility to go to court and let the judge know that the debt has exceeded the statute of limitations.

NOTE 2:
A statute of limitations may be reset if;

1. Consumer makes a payment on the past due account.
– For example: If Capital One calls you in May 2022 for a $5,000 debt and you made a $5 payment, the SOL has reset and the 4 years countdown clock starts up again starting from 05/2022.

2. Consumer makes payment arrangements.
– If you make payment arrangements to settle the debt, the SOL restarts (even if you have not yet made any payments).

If a creditor is suing you and your debt has passed the statute of limitation, go to court and let the judge know that the debt has exceeded the SOL and request that the case be dismissed.

If the debt you are being sued for is legitimate and still within the statute of limitations, settling the account before the court case would be your best option.

If you’re able to settle the account before the court date you can avoid a court judgment.

If you cannot come to an agreement with the plaintiff, you can go to court on the court date and when the case is called you can request that the attorneys provide debt validation documents, which include a copy of the service contract/application as well as copies of statements showing how you accumulated the amount that you are being sued for.

If the plaintiff’s attorneys don’t have the documents the case will be either continued or dismissed, if they have the documents the judge will rule in the Plaintiff’s favor and a judgment will be entered against you.