How do credit card companies determine when and who to sue?

Question

I've been curious; I've seen people with $15 and $20,000 in CC debt get sued, but that led me to wondering what, under "normal" circumstances, is required before a CC company would sue a cardholder? Seems much under $2,000 isn't worth it, or is that wrong? Is a debt buyer who acquires a debt once the CC company charges it off more likely to sue?

Answer 1

it would depend on the debt - if it would cost more to sue they aren't likely to go for it...
and it would also depnd on the person's ability to pay...if they are homeless and have nothing to convert to cash thy would probably not sue....if they were donald trump - they would go for it...

Answer 2

Good question.
The decision to sue is based on the amount owed to the credit card company. The federal law applies to all states but there are unique laws in individual states. So check out your state - normally the Business & Professional Regulation Dept etc...

I am not a credit professional or banker. However, if you wish to consolidate debt please check out www.clarkhoward.com or Consumer Credit Counseling Service. There is no need to pay someone to do this. Real help can be gained by organizations like this where the CC company pays the fees.

Most debt will drop off after 6 years from your credit report. But, you must follow the rules for this to happen. They are very strict. And by that time probably 3 different collection companies have taken over your debt. One promise for - one payment - by anyone answering the phone. You set back the ability for the debt to drop off another 6 years. So do homework if you do not plan to pay the debt.

Answer 3

Speaking as a nationally known credit score and lending expert (book, radio shows, newspaper columns, etc.)...

For my book I investigated this area for a long time. The only patterns I saw was that certain cards were more likely and less likely to sue than others.

Particularly vicious at the time were Citi, Discover, Direct Merchants and MBNA recently merged with BofA who was a very mild company.

Citi in particluar didn't care whether they lost money trying to sue. Supposedly they LOST $40million trying to intimidate people out of "settling" debt through such companies, this was 2002 I think.

I've not heard if $15 getting sued, but $900 yes.

Also, the companies change their policies over time. Mild companies get aggressive and visa versa. One trend has been that it is now considered to take 24+ months after default to be "safe" from law suit. It used to be much shorter.

Answer 4

From a strictly legal perspective, if you a one day late and on $0.01, they CAN sue. Obviously, no one will bother unless you owe enough to make it worth their time. A company that buys debt is MUCH LESS likely to sue, but almost certain to threaten to sue. The already know there are no assets to collect even if they win. If there were, the original creditor would have sued instead of selling the debt.

Answer 5

As a former bill collector it would depend on what you owed and what you did for a living. If you were self employed we wouldn't bother. If you had a good job where we could garnish wages we would go for it. Generally they turn debts over to a collection agency and let them handle it. If you were at your job longer than a year and your debt was over 500.00 we would sue.

Answer 6

it depends on your state and assets you have that they are aware of. debt buyers are more likely to sue-yes

Answer 7

It would depend on the amount owed, how long it has been since the person paid, and if they think the person will pay.