Small Claims Court for Credit Card Debts


Small Claims Court for Credit Card Debts

When it comes to handling credit card debt, many people aren’t aware of the fact that unsettled debt can end up in court. Contrary to what some people may think, creditors have the option of pursuing a debt in a courtroom context if the debtor refuses to take proactive steps to settle his or her unpaid balance. Most creditors, however, prefer to settle the debt without court interference because they have to spend money on attorneys to pursue their claims. When creditors do pursue a debt via lawsuit, they often pursue that debt in small claims court. In this post, we’re going to discuss the basics of small claims court and its significance in the context of credit card debt collection.

Failing to Pay Credit Cards Can Lead to a Lawsuit

  If someone misses one or two credit card payments, the chances that he or she will be hauled to court are zero. As mentioned, creditors know that pursuing a debt in the courtroom is really the last option. But, if a debtor consistently fails to make payments on his or her debt, ending up in court is a distinct possibility. Before taking you to court, however, a creditor will pursue other options first, including sending the debt to a third-party collection company. If the collection company’s efforts are unsuccessful, then the debtor will probably receive a court summons. There is no way to predict the timeframe for this type of thing, but few creditors would pursue a lawsuit within the first 6 months of a delinquent account. When it comes to resolving debts, particularly credit card debts, lawsuits are not the usual way of handling things.

Basics of Small Claims Court

  If a creditor does pursue a lawsuit to recover your credit card debt, there is a good chance that the matter will be handled in a small claims court. There are quite a few things which distinguish small claims court from other civil claims courts, but for now we will just highlight the key points. One of the main points is that small claims court has a maximum limit to how much money can be pursued; this is true even if the underlying debt itself is larger than the limit. In Florida, the limit is $8,000, as it is in most jurisdictions. If a creditor chooses to litigate a claim in small claims court, and the underlying debt is $10,000, only $8,000 can be recovered, exclusive of court costs and fees. In addition to a recovery or damage limit, small claims court is also distinguished by its relatively low level of formality, its speed as compared to normal court, simpler evidentiary rules and procedures, and other things as well. Simply put, if you’re summoned to small claims court, you can expect the matter to be resolved fairly rapidly.

Consider Bankruptcy as an Option

  If you’re concerned about being summoned to small claims court, or another court, because of unpaid credit card bills, remember that you have options. There are various ways that you can go about resolving your debt such that your overall financial health is preserved. One option which more people should consider is bankruptcy, as a Chapter 7 can literally wipe out credit card debt altogether in many cases. For more information on that, get in touch with us.

Contact Financial Freedom Advocates for More Information

If you’d like to learn more, please contact Financial Freedom Advocatesfor additional information by calling 786-668-6688.
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