Getting a Lawyer for Credit Card Debt: Fees and When It’s Worth It

When you face high stakes—creditors who win in court might get money from your wages or your bank account—a credit card debt lawyer can be your ally. With their help, you may find your way to a much better outcome.

What Is a Credit Card Debt Lawyer?

A credit card debt lawyer specializes in laws governing debt collection. If you’ve borrowed money you can’t repay, a credit card debt lawyer could negotiate with creditors, defend you in debt-related lawsuits, or help you file for bankruptcy protection. They grind away so you don’t have to.

On the flip side, you could also hire a debt lawyer to file a lawsuit against someone you’ve loaned money to, helping you collect on your loan. It’s a strong solution to a sticky problem.

A debt lawyer can sometimes save you the hassle of going to court by helping you through debt settlement, the process of settling a debt for less than you owe.

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Understanding the Credit Card Debt Lawsuit Process

Credit card debt lawsuits begin with late payments. If you default, creditors may reach out to you through phone calls and letters. If you don’t pay for a long time—typically three to six months—your creditor charges off your debt, and may sell it to a debt collector.

When your original creditor, like your credit card company, charges off debt, it’s written off as a loss, but the debt remains on your record. You still owe it, and your creditor can still try to collect. Or they can sell it to a debt collector, sometimes for pennies on the dollar. 

For example, a debt collector might spend $1 to buy a $10 debt. If they can collect the whole $10, or something close to it, they make a profit. If the debt collector owns the debt, they have the right to try to get you to pay, no matter how much or how little they paid for it.

Once your debt is sold to a debt collector, that collector may contact you and try to get you to pay up. If collectors can’t collect, they may sue for payment.

Documents and deadlines

If someone sues for payment, you receive documents called a summons and a complaint. The summons lets you know you’re being sued, and how to respond. The complaint details who is suing you (the debt collector) and why (to collect defaulted debt). Depending on your state, a document might be handed to you, left with adults at your home, or received by certified mail.

It’s vital that you respond to a summons by the deadline—typically 20 to 30 days. If you don’t, the court renders a default judgment. That means the court gives your creditor an automatic win. 

Most people who get sued for debt don’t show up, and debt collectors know that. In court, you can challenge things that aren’t true and take legal steps to protect yourself. 

One common debt lawsuit defense is that the statute of limitations has passed. The statute of limitations is the amount of time a creditor has to sue you. This varies by state, and is usually from three to 15 years. Once the time goes by, a creditor doesn’t have the right to sue you and win a judgment for that debt. If they do, you could ask the court to throw out the lawsuit.

When to hire a credit card debt lawyer

A credit card debt lawyer is most useful before a creditor successfully sues you. Once wages are garnished (when creditors can take part of your paycheck), it may be difficult to stop collections. A debt lawyer can help you file for Chapter 7 bankruptcy if you qualify, which would stop garnishment immediately (but not always permanently).

You can hire a credit card debt lawyer to represent you in court. They can use strategies that discourage debt collectors from following through with collection, or help you negotiate a settlement. A strong settlement could help you get rid of your debt for a fraction of what you owe.

You could also represent yourself in court. Again, just showing up in court gives you an advantage in negotiations. Debt collectors tend to count on your not showing up. They’re not there to fight expensive legal battles—they’re usually there to collect default judgements on small debts.

Outcomes of a credit card lawsuit

A successful defense could mean the debt collector can’t collect your debt. The debt collector may lack sufficient documentation to prove you owe the debt or that the amount is correct. 

If the debt is valid, you could try to reach a settlement outside the legal system. Potentially, you could settle for a fraction of what you owe. A settlement would remain on your credit history, and you would need to pay something, but it’s not uncommon to settle a debt for 50% or less of what you owe. Once you settle a debt, it’s behind you. 

An unsuccessful defense could result in having your wages or bank account garnished by the debt collector. A good credit card debt lawyer could help you avoid that worst-case scenario.

Why Should You Use a Credit Card Debt Lawyer If You’re Sued by a Credit Card Company or a Debt Buyer?

Hiring a credit card debt lawyer can offer peace of mind and potentially save you money, if you can afford their services on the front end. Doing nothing when sued for credit card debt doesn’t work out well—yet over 70% of people take that route. 

Pew Research shows that while nearly all lenders hire lawyers for debt collection, fewer than 10% of defendants do. Those who hire a credit card debt lawyer are “more likely to win their case outright, or reach a mutually agreed settlement,” according to Pew.

How Can a Credit Card Debt Lawyer Help When You Receive a Summons to Court?

In general, credit card debt lawyers bring expertise and experience to the room. Specifically, here’s what credit card debt lawyers do:

• Leverage legal knowledge: Understand and enforce laws creditors must follow, protecting you from intimidation or illegal tactics.

• Handle paperwork: Manage legal documents and deadlines to avoid costly errors.

• Negotiate: Secure debt relief or affordable payment plans if you owe but can’t pay in full.

• Represent you: Defend you in court or guide you through bankruptcy.

How might your lawyer defend you in court? There are a few strategies.

Your lawyer might identify weaknesses in your opponent’s case. For example, they might bring up the statute of limitations, which, when applicable, protects you from being sued for debt that’s old. The time limit depends on where you live, and typically ranges from three to 15 years.

Another strategy is to force the creditor to provide proof you owe them debt. Debt collectors often attempt to collect with only the barest evidence you owe them money. Courts may be unwilling to let that slide, and your lawyer may be able to leverage this for settlement.

Your lawyer could dive deeper into the details. They might dispute the amount owed (maybe the creditor exaggerated how much you owe), call out fraud (it happens), or discover that you’ve already paid the debt.

The Fair Debt Collection Practices Act

A good credit card debt lawyer is familiar with the laws credit card debt collectors must follow, and might use violations in your favor. For example, there are laws around how debt collectors must serve your lawsuit papers (in person, via mail, etc.).

The Fair Debt Collections Act protects you against sloppy or shady debt collectors. It forces debt collectors to notify you of debt in certain ways, to be transparent with collection practices, and to avoid shady tactics (like lying to or misleading you).

State-Specific Laws and Protections

Your state may offer protections that help you and your credit card lawyer in court. 

Statute of limitations and wage garnishment caps

Statutes of limitations, which limit how long a creditor can sue for debt, vary by state. For example, the time limit to sue for credit card debt is four in Texas, six years in Arizona, and 10 years in Iowa. It ranges from three to 15 years (though in some cases, it can reset).

Wage garnishment is capped at 25%, meaning most debt collectors can only collect 25% of your disposable income each paycheck—but some states have stricter caps. In California, it’s 20%. In Arizona, it’s half that (10%), and half that again (5%) if a judge determines you’ve shown extreme economic hardship. Wage garnishment is banned in Texas, Pennsylvania, and both the Carolinas.

If you owe back child support or spousal support, you could be garnished at a higher amount. In that case, up to 50% of your earnings can be withheld if you’re supporting another spouse or child, and 60% if you’re not. 

Community property states

In community property states, you can be held responsible for your spouse’s debt. Nine states operate by community property laws: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A credit card lawyer may be able to help you navigate how you’re held responsible for your partner’s debt.

Judgment interest rates

Even after a creditor wins a judgment against you, your debt doesn't stop growing. States set interest rates on judgments—extra money added yearly to what you owe. These rates range from 4% to 12% annually, depending on your state.

For example, a $5,000 judgment in Massachusetts grows by 12% each year. After five years (if you don’t make any payments against the debt), you'd owe over $8,800. In states with lower rates, like Maine at 4.5%, that same debt would grow more slowly. This interest adds up until the debt is paid in full.

Judgment renewal periods

Judgments can last for decades. Most states allow creditors to renew judgments when they expire. In California, a judgment lasts 10 years, but can be renewed for another 10. Some states permit unlimited renewals.

This means a debt from your 20s could follow you into retirement. A credit card debt lawyer can help you deal with the debt so you don’t have to let that happen. Taking action early could save you from years of growing debt.

Finding the right legal help

State laws are complex and change regularly. What works in Texas might not apply in Tennessee. Before making any major decisions about your debt, consult with a local attorney who knows your state's rules. Many offer free consultations to talk about your options.

When Should You Consider Hiring an Attorney?

Not every debt situation demands a credit card debt lawyer. That said, a credit card debt lawyer could be an important ally in complicated or high-stakes cases, such as when:

• You dispute the debt amount or the creditor’s right to sue (for instance, you believe the statute of limitations on credit card debt has expired).

• You’re unsure how to communicate with creditors or debt collectors, and you’re worried about making things worse.

• You want to be represented in court.

• You face harassment or suspect debt collectors are breaking the law (it happens).

• You want help with debt resolution (negotiating a payment plan or getting your creditor to accept a lower amount).

• You’re exploring bankruptcy.

Aggressive creditors and debt buyers sometimes bank on fear, suing for debts they can’t legally collect. A good credit card debt lawyer can recognize this and send them packing.

On the other hand, if it’s more expensive to hire a lawyer than to pay your debt, go with the cheaper option. If your creditor files a lawsuit because they can’t reach you by phone or mail, you may be able to sort things out with a simple phone call. 

What Is the Procedure When Dealing with a Debt Lawyer?

Most credit card debt lawyers offer a free initial consultation to review your case and estimate costs for handling a lawsuit, settlement, or bankruptcy. 

When a creditor sues, you must file a formal legal response called an Answer. Your credit card debt lawyer pinpoints defenses or counterclaims, then files the Answer for you, stating whether you owe the debt, listing defenses, and so on. They may negotiate a settlement to avoid court, represent you if it proceeds, or recommend bankruptcy if it’s your best option.

What Happens When You Get a Lawyer for Credit Card Debt?

You and your lawyer go over your situation, including the debts you owe. You develop a strategy to handle debts, and your lawyer moves the strategy forward. They may handle the important details like negotiating with creditors or filing paperwork.

For your initial consultation, bring copies of your debt records and your records of communication with the debt collector. This helps you and your lawyer create next steps.

Once you lawyer up, let debt collectors know the name of the attorney representing you and how to contact them. Federal law requires debt collectors to go through your attorney when they know you have one. Debt collectors can only contact you directly when your lawyer fails to respond within a reasonable timeframe.

How Much Does It Cost to Hire a Credit Card Debt Lawyer?

It varies, but lawyers often charge $500 or more to handle a simple credit card debt. Lawyers charge more for complicated cases, sometimes many times more. Your lawyer might charge hourly for negotiating with creditors, or charge you a percentage based on your debt size or on how much they save you during settlement. Clarify fees during your consultation.

How Do You Find Credit Card Debt Lawyers?

Look for a lawyer experienced in consumer law or debt collection defense. Here are a few ways to find one:

• Contact a lawyer referral service via the American Bar Association or your state bar.

• Check state legal aid programs (these may be income-dependent).

• If you’re in the military, consult your local JAG office.

• Ask trusted contacts for attorney recommendations.

• Get a referral from an attorney you already know.

Contact attorneys you find online after you check their reputation through review sites and verify that they are licensed to practice.

How to check if they’re legitimate: Search a lawyer’s name on the state bar website or call the state bar organization to find out if they’re in good standing.

Questions to ask when interviewing debt lawyers

Finding the right lawyer matters. Here's what to ask during your free consultation.

"How much of your practice is debt defense?"

You need someone who knows this stuff inside out. Ask how many cases like yours they've handled recently. Did they get debts dismissed? What settlements did they negotiate? 

"How do you charge?"

Some lawyers charge flat fees (one price covers everything). Others bill hourly. Some take a percentage of what they save you. Ask if they offer payment plans. Will they refund unused retainer money? Get it all in writing.

"Can you show me your work?"

Many lawyers keep examples handy—redacted court filings or settlements they've won. 

"Are you in good standing with the bar?"

Ask about disciplinary actions. Do they have malpractice insurance? (They should.) You can double-check their status on your state bar website.

"How quickly do you respond to clients?"

Debt lawsuits have strict deadlines. If your lawyer takes a week to call back, you could miss important dates. They should return calls within a day or two, max.

"What if there's an emergency?"

Say creditors freeze your bank account. Can your lawyer file emergency paperwork that day? Some lawyers aren't available for urgent situations. It’s best to know this upfront.

Don't feel bad grilling potential lawyers. It's your money and your case. The right questions now save headaches later.

Alternatives to Hiring a Lawyer for Debt

If you can’t easily hire an attorney, consider these alternatives.

Low-cost legal help: If your income is on the lower side, you may be able to apply for low-cost or free help from a legal aid program. Local courts, libraries, and community centers may have information about programs you can apply to. 

Limited advice: You could book an hour or two with an attorney for advice. That may be much cheaper than full representation, and most lawyers start with a free consultation. That might be all you need to determine how strong your case is and what to do next.

Self-representation: Attorneys and judges are used to amateurs in small claims court, which is where you might end up if your debt is small. You may want to represent yourself if you're comfortable filling out forms and speaking in front of people.

Debt settlement programs: You could hire a professional debt settlement company to negotiate with creditors on your behalf. While this proceeds, you can file your Answer with the court to show the creditor you're not giving up, and to buy yourself time to settle.

At Freedom Debt Relief, if a creditor sues you while you're enrolled and making your monthly deposits on time, we connect you with our Legal Partner Network. These attorneys try to negotiate a settlement at no extra cost to qualifying clients. (This benefit doesn't cover lawsuits started before enrollment, or debts not in the program.)

Settlement during active lawsuits: Getting sued doesn't mean settlement's off the table. Creditors know trials are expensive and time-consuming. Many will still negotiate rather than gamble on collecting the full amount. The trick is to move fast—once there's a judgment against you, your options shrink.

Bankruptcy: Sometimes debt becomes too much. That's when bankruptcy makes sense. Chapter 7 wipes out credit card debt if you qualify (it’s based on income). Chapter 13 lets you keep your stuff while paying back debts over three to five years.

Here's the magic of bankruptcy's "automatic stay": As soon as you file, creditors must stop everything. No more wage garnishment. No more lawsuits. No more angry calls. Bank account freezes? Gone. It's instant relief when you need it most.

Settlement versus bankruptcy: Debt settlement and bankruptcy are different strategies for different situations. Bankruptcy is legal protection from your creditors. Creditors can’t opt out. Chapter 7 bankruptcy is the kind that could wipe away your debt in a matter of months. Not everyone qualifies, but for those who do, most are successful. Chapter 13 is a three to five year repayment plan, and about half of these cases fail. Bankruptcy is a public record.

Debt settlement is a voluntary agreement you work out with your creditor when you’re experiencing financial hardship and you can’t afford to fully repay your debt. Creditors don’t have to participate. Debt settlement could significantly reduce your debt, and may be a good alternative to Chapter 13 bankruptcy. Debt settlement is private.

Debt settlement and all varieties of bankruptcy cause significant damage to your credit standing. Anyone can build and maintain a good credit score over time, even after credit score damage has been done. The factors that influence your credit score are payment history, amounts owed, credit age, inquiries, and credit mix.  

The Consequences of Ignoring a Lawsuit

Ignoring a lawsuit is never a good idea. Here's what happens when you don't respond.

What's a default judgment?

If you don't file an answer within 20 to 30 days, the court will almost certainly decide the case in favor of the creditor suing you. It's called a "default judgment." You lose without ever telling your side. The judge assumes everything the creditor said is true, and grants them legal power to collect.

How creditors collect after winning

With a judgment, creditors gain powerful collection tools:

Wage garnishment: Creditors can take part of your paychecks until the debt and fees are paid. Your employer receives a court order, and must send that money to your creditor. 

Bank account levies: Creditors can freeze your bank accounts and take money from them. One day your account works fine. The next, you can't access your money. They take what's available, up to the judgment amount.

Property liens: In many states, judgments automatically attach to real estate you own. When you sell or refinance, you have to pay off the lien first.

Long-term credit impact

A judgment appears on your credit report for seven years, typically dropping your score by 100 points or more. This affects your ability to:

• Get approved for loans or credit cards

• Qualify for a mortgage

• Rent an apartment (many landlords check credit)

• Get certain jobs.

The judgment amount also grows with interest, making it harder to pay off over time.

Why speed matters

Every day you wait can make things worse. Responding to the lawsuit—even without a lawyer—gives you a fighting chance. You might have valid defenses. File your Answer by the deadline.