Is it true that any credit card company can take legal action if you fail to pay you're debt back to them?

Question

And also sieze you home, car or truck, or any assets you might have to get their money.

Comments...Opinions...

Answer 1

It depends if the credit card is a secured or unsecured loan. Most credit cards are unsecured loans, meaning if you do not pay them back the worst that will happen is you will accumulate a lot of debt and ruin your credit score. This is a very common occurence, people apply for credit cards and max them out at Bloomingdale's or wherever, eventually they cannot even pay the minimum amount due each month because the interest rate continues to snowball the total amount making the minimum even difficult to pay. So these people stop paying on their credit cards and stop answering phone calls and letters from the banks. Eventually the bank will send the unpaid debt to a collection agency and/or lawyer specializing in collecting debts. But neither a collection agency or a lawyer can do much to retrieve the money, they'll try to scare the person by calling and saying "yes this is so and so from Smith and Smith attorneys at law, we're calling for Mr. Jones who owes Visa $10,000, blah blah blah". If the credit card is an unsecured loan the bank, the collection agency, and the lawyers cannot do much more besides writing letters and making phone calls. They cannot seize your house, car, real estate, bonds, nothing of monetary value to pay back the debt. And they can't charge you with a crime and get you incarcerated, if that was the way it worked a lot of people would be serving time in prison for this very thing. Find out if the credit card is a secured or unsecured loan, most likely it is unsecured. You would of had to go through more paperwork when applying for the credit card if it was a secured loan, you would probably remember signing a deed saying that if you don't pay what you owe back they are going to foreclose on your house.

Answer 2

Of course they can take legal action. A debt is a debt. As far as homes, cars, etc., goes-unsecured debt is just that. That being said, you really don't want a judgement against you. I worked for a credit card company and we settled for about 25 cents on the dollar a lot of the time. If the debtor declares bankruptcy, then the unsecured creditors could end up with all of nothing so they have an incentive to try get whatever they can and then release the debtor from his obligations. That's not good for one's credit rating, but may be a better option than just hoping it goes away or declaring bankruptcy.

Answer 3

They can't sieze your assets. They can take legal action as you are legally obligated to pay them back. There are many laws backing the credit card companies, but there are more laws backing the consumer. If you file bankruptcy, the credit card company will get in line with all the other creditors to get a piece of your financial liquidation.

Answer 4

Of course they can take legal action against you! You signed a legal contract with them, and you broke it. This is the entire reason for the existence of civil courts!

Answer 5

yes