A judge issues a credit card judgment to confirm that a debt is owed and to spell out the steps which may be taken to collect the debt. Some examples of “steps’ which can be taken include the seizing of assets, garnishment of wages, and placing liens against real property.
A judgment of this type normally follows months of repeated attempts to collect the debt. It is best to do everything possible to keep this from happening and this article will give you ideas to consider if you feel you may be facing a credit card judgment.
If you are behind on your monthly credit card payments, you will likely receive a multitude of letters and phone calls from the credit card provider requesting that you bring your account current. Once this happens, the credit card provider will request that you pay the balance in full or make arrangements for a payment plan. If you decide to ignore these calls and letters, your account may be charged-off.
The credit card provider may decide to sell your debt to a collection agency if you make no effort to work with the credit card provider to pay the debt down. Collection agencies typically purchase debt for cents on the dollar, sometimes for as little as 8 cents to 12 cents per each dollar purchased. You will receive requests again, this time from the collection agency, to pay the amount owed by either a lump sum payment or monthly payments. Keep in mind that your credit score will suffer if your credit card debt is purchased by a collection agency from the credit card provider.
Collection agencies are normally loathe to file a court action to collect a debt which to them is actually a small amount, as stated above, normally in the range of 1/10th of what you originally owed. If you do not come to an agreement with this collection agency, it may sell your debt to yet another collection agency and the process will begin all over again.
If you cannot come to an agreement with this second collection agency, it may decide to file that dreaded law suit. This is when you may be looking at a credit card judgment coming your way. Legally speaking, you have the right to plead your case to the judge. If you can prove that the debt owed is not yours or if you can prove that there are extenuating circumstances, the judge may revise the judgement.
If you are unable to prove that the debt is not yours or that you are a victim of extenuating circumstances, the judge will issue a judgment which will set out how the debt may be recovered. Depending on state law, this may include taking money from your bank account, garnishing your wages, seizing assets, or even filing liens against real property.
You should consider working with the credit card provider and collection agencies to get the debt paid. This will lessen the damage to your credit score. If you can come to an agreement with the credit card provider or collection agency, you will be able to dodge a credit card judgment.
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