Credit Card Debt Lawyer: Should You Use One?
- UpdatedDec 13, 2024
- Credit card companies can sue you if you don’t pay your debt.
- The worst thing you can do is ignore a summons. You’ll automatically lose your case.
- A credit card debt lawyer can represent you in court, negotiate a settlement or help you file bankruptcy.
Table of Contents
If you’re sued for credit card debt and lose, creditors can cause a lot of trouble. If you’re working, they might deduct money from your paychecks. They might also freeze your bank accounts, and you might have to pay their court costs. When the stakes are high, a credit card debt lawyer may help you achieve a better outcome.
What is a credit card debt lawyer?
Debt lawyers specialize in law concerning the collection of debt. If you loan money to someone, you may use a debt lawyer to file a lawsuit to collect it. If you borrow money you can’t repay, a debt lawyer may negotiate settlements with creditors, defend you against debt-related lawsuits, and file bankruptcy on your behalf.
If you’re sued for credit card debt, collection accounts or other loans, a debt lawyer can defend you and make sure that your legal rights are respected. They may even be able to help you avoid going to court.
Why should you use a credit card debt lawyer if sued by a credit card company or a debt buyer?
The worst thing you can do when sued is nothing, but that’s exactly what more than 70% of people do. If you can afford to do so, turning over your debt problem to an attorney can provide peace of mind and may save you money over time.
According to Pew Research, nearly all lenders hire lawyers to pursue debt collection, but fewer than 10% of defendants do. Pew also found that people who do hire attorneys “are more likely to win their case outright or reach a mutually agreed settlement with the plaintiff.”
How can a credit card debt lawyer help you if you receive a summons to court?
Credit card debt lawyers have years of training and experience with debt collectors and creditors. They can quickly evaluate your situation and your best options.
Lawyers should understand the laws that creditors and bill collectors must follow. They can make sure your rights are respected and push back against intimidation, misrepresentation and other tactics debt collectors use. They can help you sue creditors that violate the law.
Debt lawyers have staff to keep track of all the paperwork involved in legal fights and to avoid costly mistakes.
If you owe the debt but can’t afford to repay it, they may negotiate debt relief and an affordable payment on your behalf.
Debt lawyers can represent you in court or help you file for bankruptcy if necessary.
When should you consider hiring an attorney
Not every debt or lawsuit requires a lawyer. If the amounts involved are smaller, paying a lawyer might be more expensive than paying the amount you owe. If your creditor filed a lawsuit because they couldn’t reach you by phone or mail, then you may be able to sort things out yourself with a phone call.
However, there are many cases in which a debt attorney can help you, especially if the amounts involved are large. Here are a few examples:
You don’t owe the amount you’re being sued for. Even if you borrowed money in the past, your creditor might not have the right to sue you. A debt lawyer can help you understand and fight for your rights.
You’re uncertain of what you can and can’t say to a creditor or debt collector. Saying the wrong thing at the wrong time can turn an uncollectible debt into an expensive mess.
You can’t go to court and don’t know what to do.
You’re being harassed and suspect a creditor is breaking the law.
You want help with debt resolution – negotiating a payment plan or agreeing to pay a lower amount instead.
You’re considering bankruptcy.
Aggressive debt buyers and creditors often count on consumers being intimidated, and it’s not uncommon for them to sue for debts that they can’t legally collect. A lawyer in your corner can send them packing.
What is the procedure when dealing with a debt lawyer?
Many attorneys offer a free initial consultation in which they’ll briefly discuss the case with you and estimate what it will cost to handle your lawsuit, negotiate a settlement or file bankruptcy.
Once a creditor files a lawsuit, your response must take a specific legal form called an Answer. Your attorney determines if you have a defense or counterclaim and files the paperwork for you.
In your Answer, you’ll either admit or deny that you owe the money, state any defenses you plan to present, list any counterclaims, and disclose income that your creditor can’t take from you, such as your monthly Social Security income.
You may be able to avoid going to court if your lawyer can help you reach a settlement or arrange an affordable payment plan with your creditor. Otherwise, your attorney will represent you in court. If you cannot defend your lawsuit, agree to a settlement or afford a payment plan, your attorney may recommend filing for bankruptcy instead.
Alternatives to hiring a lawyer for debt
Not everyone needs an attorney or can afford one. If you’re uncomfortable handling the matter yourself and can't afford an attorney, try applying for low-cost or free help from a legal aid program for people with low income. Local courts, libraries, and community centers may be able to point you in the right direction.
Other options include booking an hour or two with an attorney for advice. That costs much less than full representation, and most lawyers offer an initial consultation for free. That might be enough to tell you how strong your case is and how to proceed.
Depending on how much you owe, your case might be in small claims court, where many people show up without attorneys and judges are used to amateurs. If you’re comfortable filling out forms and speaking in front of a few people, you may be perfectly fine representing yourself.
You might also consider seeking professional debt settlement services. These companies are experienced negotiators who don’t charge upfront fees. You only pay if they can reach a settlement that’s agreeable to you. You should file an Answer with the court to show the creditor that you’re not giving up, and to buy yourself some time.
A look into the world of debt relief seekers
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during November 2024. This data highlights the wide range of individuals turning to debt relief.
Credit card balances by age group for those seeking debt relief
How do credit card balances vary across different age groups? In November 2024, people seeking debt relief showed the following trends in their open credit card tradelines and average credit card balances:
Ages 18-25: Average balance of $9,117 with a monthly payment of $282
Ages 26-35: Average balance of $12,438 with a monthly payment of $390
Ages 36-50: Average balance of $15,436 with a monthly payment of $431
Ages 51-65: Average balance of $16,159 with a monthly payment of $529
Ages 65+: Average balance of $16,546 with a monthly payment of $499
These figures show that credit card debt can affect anyone, regardless of age. Managing credit card debt can be challenging, whether you're just starting out or nearing retirement.
Student loan debt – average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average student debt for those with a balance was $46,980. The percentage of families with student debt was 22%. (Note: It used 2022 data).
Student loan debt among those seeking debt relief is prevalent. In November 2024, 27% of the debt relief seekers had student debt. The average student debt balance (for those with student debt) was $48,703.
Here is a quick look at the top five states by average student debt balance.
| State | Percent with student loans | Average Balance for those with student loans | Average monthly payment |
|---|---|---|---|
| District of Columbia | 34 | $71,987 | $203 |
| Georgia | 29 | $59,907 | $183 |
| Mississippi | 28 | $55,347 | $145 |
| Alaska | 22 | $54,555 | $104 |
| Maryland | 31 | $54,495 | $142 |
The statistics are based on all debt relief seekers with a student loan balance over $0.
Student debt is an important part of many households' financial picture. When you examine your finances, consider your total debt and your monthly payments.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
Show source
What is the difference between an original creditor and a credit card debt buyer?
The original creditor is the individual or company you borrow money from – for instance, your bank or credit card company. Original creditors typically try to contact you for several months once you start missing payments. If unsuccessful, they may take you to court, send your account to a collection agency or sell your account at a discount to a debt buyer.
Debt buyers purchase past-due accounts and get to keep whatever they can collect from you.
Collection agencies can be hired to collect past due accounts for original creditors or they may function as debt buyers.
What kind of fees can a credit card debt lawyer take?
Lawyers can structure their fees in several ways: flat fee, hourly, on a contingency fee basis, or on retainer. Hourly rates are billed in six minute increments. Flat fees are set upfront for services. Retainers are upfront amounts paid into an account the lawyer then spends down to pay for services. You’d receive a regular accounting of these charges. Contingency fees are charged only for results and they are typically a percentage of a recovery. For instance, 25% of the judgment won or debt settled.
If your attorney represents you in court, you’ll likely pay hourly. However, routine matters may be billed at a flat rate, so if your case is simple, you may be able to find a lawyer willing to charge a flat fee. The fee for filing for bankruptcy is often billed at a flat rate. Debt settlement services are often billed on contingency.
Can you negotiate credit card debt after being sued?
It’s much easier to negotiate before losing in court because the court can help your creditor collect the full balance plus interest and court costs through wage garnishment, bank account levies or property liens. It’s possible to negotiate after losing, but success is less likely. However, a contingency-fee attorney or professional debt settlement company may be able to help, and they collect a fee only if they succeed, so it can’t hurt to try.
Credit Card Debt
Credit Card Debt
