A credit card bill has gone unpaid for a few months. The calls have picked up, you’re receiving letters about legal action, and one question keeps surfacing: can they actually take you to court over your debt?
You’re not alone in asking, and the answer is yes, they can. That’s the beginning of the story, though. A lawsuit has to follow rules, it takes time, and you have far more say in how it ends than a scary letter suggests. This guide covers who can sue, when, what happens if they do, and what you can do about it.
Yes, a Credit Card Company Can Sue You Over Unpaid Debt
A credit card agreement is a contract. When you stop paying, the card issuer or whoever ends up owning the debt, can ask a court to order you to pay. Nothing about being behind on a card is a crime, but the balance is a legal obligation a creditor can enforce.
A lawsuit is rarely the first move. You’ll usually hear from the creditor by phone and mail well before court papers arrive, and the FTC notes that some collectors would rather settle than go through a long and expensive lawsuit. That’s why the steps you take early matter so much.
Who Can Sue You for Credit Card Debt?
The name on the court papers may not match the card in your wallet. According to the CFPB, the original creditor is the company that gave you the loan or credit, and it can collect a past-due account itself, hire a debt collector or sell the account to another party. That means a lawsuit can come from:
- The original creditor. The card issuer sues you directly over the balance.
- A debt collector. A third party the creditor hired to collect the account.
- A debt buyer. A company that purchased your account and now owns the debt outright or a collector it placed the account with.
Knowing which one is suing matters, because your rights differ. Third-party debt collectors have to follow the federal Fair Debt Collection Practices Act, and if you believe one has broken the law, the FTC explains how to report it.
How Long Can a Credit Card Company Sue You?
Every creditor’s window for legal action has a limit, called the statute of limitations. The CFPB reports that most states set it between three and six years for debts, but some may be longer, and the exact period can depend on the type of debt, the state where you live, and the state law named in your credit agreement.
Two cautions before you count on that clock running out:
- The clock can restart. Making a partial payment or acknowledging you owe an old debt, even after the period has expired, may restart the time period.
- The court won’t raise it for you. A collector who sues after the statute of limitations has passed is violating the Fair Debt Collection Practices Act, but a court may still award a judgment against you if you don’t show up and raise the statute of limitations as a defense.
The debt itself doesn’t disappear when the window closes. In most states, collectors can still send letters and call to ask you to pay; they just can’t sue or threaten to sue.
What Happens If You’re Sued for Credit Card Debt?
Two documents usually arrive together. The summons tells you a lawsuit has been filed – or, in some states, that one is about to be filed, since some states allow the plaintiff to serve you before filing with the court. The complaint tells you who is suing, why, and how much they claim you owe.
Your deadline to respond is usually 20 to 30 days from receiving the notice. Miss it, and the court can decide without your side of the story. Filing an Answer with the court prevents an automatic win for the collector, and it opens the door to working the account out. For a full walkthrough of that process, see our step-by-step guide to responding to a debt lawsuit.
What Happens If You Don’t Respond
Ignoring the papers doesn’t pause anything. The FTC is blunt about it: the case can go ahead without you, and the collector could win by default because you didn’t show up. If the court rules against you, the collector may be able to garnish your wages or bank account or put a lien on your property, like your home. They can also ask the court to add collection costs, interest, and attorney’s fees. A judgment will likely show up on your credit report, too.
Even then, you have protections. Some income can’t be garnished, including:
- Social Security benefits
- Veterans’ benefits
- Unemployment benefits
- Certain pensions
If you receive protected income, you still need to respond to the lawsuit, but you can let the court know those funds are exempt.
What Are Your Options If You’re Sued for Credit Card Debt?
Being served feels like the end of the road. It’s closer to the start of a process where you still hold cards. Once you’ve responded by the deadline, these are the paths in front of you.
Make Them Prove It
When you show up, the burden shifts to the other side. The FTC notes the collector will have to prove that you owe the debt, prove that the amount of the debt is correct, and prove that they have the legal right to sue you. Look over your own records and the validation information collectors are required to send you. Errors in the amount, in who owns the account or in whether the debt is even yours are all legitimate defenses.
Check Whether the Debt Is Too Old
If the account has been dormant for years, compare the dates against your state’s statute of limitations. If the time for the collector to sue has already expired, the debt is time-barred, and you can raise that as a defense in your Answer.
Work Out an Agreement
Responding often leads somewhere other than a trial. The CFPB points out that you may be able to work out a compromise with the collector before a court makes a judgment. Even if a lawsuit ends in a judgment, you might be able to arrange a repayment plan with the collector.
If you are sued for a credit card debt that’s enrolled in a debt relief program, be sure to contact them right away. Typically, they can work with you to reach an agreement with the creditor before things go to court.
Get Legal Help You Can Afford
You don’t have to face a courtroom alone. If you have a low income, you may qualify for free or reduced-fee legal help through a legal aid organization, and some attorneys who handle debt collection defense offer free consultations or reduced fees.
What to Do the Day a Summons Arrives
- Don’t ignore the summons. Write down the response deadline the moment you open it.
- If you’re enrolled in a debt relief program, tell your Client Success Specialist immediately. They cannot provide legal advice but they can review the notice with you and talk through your next steps.
- File an Answer with the court before the deadline. Keep copies of everything you send and receive.
- Consider legal aid if you want representation you can afford.
Worried About an Account Heading to Court? Talk to Us
Whether you’re weighing your options, watching one card slide toward collections or already enrolled and looking at a summons, talk to a Certified Debt Specialist. They can review your accounts and help you prioritize which accounts to address.
Frequently Asked Questions
How Do You Avoid a Credit Card Lawsuit in the First Place?
The earlier you act, the more room you have. A creditor who is still hearing from you has less reason to spend money on court, and as the CFPB notes, working out a compromise is possible before a judgment is ever entered. Waiting until the summons arrives shrinks that room fast.
If you’re already behind on one or more cards and can’t see a way to catch up, a debt relief program addresses the bigger picture. Accredited Debt Relief targets reducing your balance, which means you become debt-free faster and for less. They can help with credit cards (including store credit cards), personal loans, medical debts, some private student loans and other unsecured debt. Clients cut eligible monthly payments by 40% or more, and they typically become debt-free in 24-48 months. There are no upfront fees; our fees are success-based, and we earn them by achieving a successful result for your debt.
Can a Credit Card Company Sue You While You’re in a Debt Relief Program?
Yes. Enrolling in a debt relief program does not legally prevent a creditor from filing a lawsuit. The CFPB warns that a creditor may file a collection lawsuit while you’re building up funds for a negotiated agreement, and it raises a red flag worth remembering: avoid any company that guarantees it can stop all debt collection calls and lawsuits, because no company can promise that.
What a lawsuit can’t do is erase the progress you’ve made in your dedicated account. Under FTC debt relief rules, the money in your dedicated account is yours, along with any interest it earns, and you may withdraw it at any time without penalty. A lawsuit doesn’t hand those funds over to us or to the program; they stay yours.
We also have experience working with 10,700+ creditors. Each case is unique, and we’ve probably worked with your creditors before. So what happens to your enrolled account once a suit is filed?
Legal action is uncommon. However, if your account is affected, it moves up in priority, and Accredited Debt Relief has a process in place to make sure you’re fully supported through it. They can’t guarantee a specific outcome or provide legal advice, but a Client Success Specialist will review the notice and your documents with you, point you toward legal resources and work to resolve the account ahead of any court date.
Whatever the specifics of your case, the first call to make is to your Client Success Specialist, who can review the notice with you and talk through your next steps.
Get a free evaluation today; the consultation is free and there’s no obligation.
The information on this site is provided as a general resource and does not constitute legal, tax or financial advice. While we strive to ensure accuracy, this content, including any third-party sources referenced, should not be the basis for any financial decision. For guidance specific to your situation, we recommend consulting a qualified professional.