It may be that you are behind on your credit card payments, a little or a lot, because you were out of work, or involved in a divorce.† When the creditor refers your account for collection, it may just be a short while before it is turned over to an attorney to file suit against you.† There are a number of options to address this situation.
First, if you have many cards and limited income, you can consider engaging a debt consolidation company to negotiate with your creditors to accept affordable monthly payments.† The way it works is that you make one monthly payment to the debt consolidation company which then distributes those funds to your creditors each month.† Beware of the out of state company looking for a large upfront fee.† It is better to seek a local brick and mortar company that you can visit if necessary, and which has a good reputation.
Alternatively, you may wish to negotiate directly with a creditor, directly or through an attorney.†Typically, creditors are willing to accept a discounted amount if it is paid in a lump sum.† Otherwise, it is likely that you will be paying the full amount over a period of time.† It is important to try to resolve the debt before the creditor retains an attorney and files a lawsuit, because then the creditor will expect you to pay not only the debt, but also the legal fees and costs.
It is possible to negotiate with a creditor after it has sued you.† You or your attorney can contact the creditorís attorney and attempt to make a payment plan.† Typically that plan would be formalized by way of a stipulation of settlement to be filed with the court.† There is a certain benefit to resolving the dispute before the trial date, so that the creditor is not inconvenienced by having to send a representative to court to testify and its attorney does not have to appear in court.
Please note that negotiation with the creditor is no substitute for filing an Answer to the complaint within the time provided by the court summons.† If you do not file an Answer and the negotiation fails, it is likely that a default judgment will be entered against you.
Whether you resolve your debt during suit or before, it is important that you put the payment arrangement in some form of writing before making payment.† It is also important to confirm that any collection agency has the creditorís authority to make the settlement with you.
The foregoing is not legal advice and should not be relied upon as such.† When you have a credit card debt crisis, your first move should be to consult with†an experienced litigation attorney†who can advise you.