Owning and using a credit card can be simple; you use it to make purchases and pay off the total charges every month. Although it may seem black and white, there is a gray area that many consumers find themselves in. Credit card companies benefit from you not paying off your balance monthly, as interest accrues the longer your account carries a balance.
The issue of legal action arises when you default on an account or surpass your credit limit. Your creditor will make you aware of your delinquency, but consumers often ignore these notifications as they expect to acquire the necessary funds before it’s too late. As the days, weeks, and — eventually — months go by of you not addressing your debt, creditors prepare to do one of two things: charge-off and sell your debt or sue you for breaching the terms of the agreement.
Why Default Judgments Happen
Debtors often presume charge-offs to be a positive thing, but it involves selling your debt to a debt buyer who may also have the right to sue you. Judges regularly issue default judgments to third-party debt collectors as they rarely face opposition from the debtor. The reason being is that debt buyers are a completely separate entity from creditors and are often ignored by debtors.
When people receive calls from unfamiliar collection companies, they usually disregard them assuming that it is a scam, unaware that this new entity is legally entitled to collect their debt. When debt collectors decide to sue you, a judge will issue a default judgment if you fail to respond with a written answer in the allotted time frame, thus granting the debt collector everything they requested. This can include:
- Wage garnishment
- Levied bank accounts
- Writ of execution
After you receive notification of a default judgment, you can file a Motion to Vacate. The court will only consider your motion if it has merit and if you follow the strict paperwork submission process. This includes submitting the motion within 30 days of becoming aware of the default judgement and many other stipulations. An experienced Illinois credit card debt settlement attorney can serve as your legal aid during this process and help you avoid it altogether.
How to Avoid a Default Judgment
The best way to avoid a default judgment is to take action upon notification of the debt collector suing you. The last thing you should do is try to make a quick payment in an effort to dissolve the issue. Doing so can have an adverse effect as it may reset the previously expired statute of limitations on debt collection for that account. The preferred response is to speak with a debt settlement attorney who can make you aware of your legal options.
Heather Benveniste with Benveniste Law Offices worked for seven years as a debt collection attorney, where she learned the tactics debt collectors often use to get debtors to pay. She now uses her inside knowledge to negotiate debt settlement with creditors on the most favorable terms to individuals like you. The news of being sued by a creditor can be intimidating, but don’t let it stop you from exercising your consumer rights! Contact us today for your free case evaluation.