Legal action against debt?

Question

Will a credit card company pursue legal action (i.e. lawsuit) for an account in default for $3-4K?

(It is a given that they will try to collect using a collection agency, but I was under the impression that such an amount is too small to justify the cost of getting lawyers/legal dept. involved.)

Oh, and what other legal actions besides a lawsuit or lien can they take?

Answer 1

I disagree with the responder who said to let the judgment sit for 7 years...if the collection agency or credit card company took the time and money to take you to court, they will try to collect on the judgment, which includes garnishing your bank account (seizing any and all money in bank accounts in your name) and/or garnishing your wages.

If they've got a judgment, make payment arrangements, but DO NOT give them your banking info. Pay them with money orders.

Answer 2

In most states, they can file suit in Small Claims Court, and the cost of the lawyer is included in the claim. While their chance of recovery, even with a judgement may not all that much, it is probably higher than handing it off to a collection agency. But a lien goes on your credit record, which is a flying red flag for future lenders. Simply put, you screwed them, they screw you.

Answer 3

No, this debt is not too small.....Every creditor is different and will respond differently to defaulted debt....Some might just sell this debt to a collection agency and forget about it while others might take you to court. It's impossible to predict which action they'll take.

Answer 4

You can never be sure what extreme action the creditors will take but I know that many of them will bully you and scare you into paying them back.

If they enter a judgement against you just let it ride for 7 yrs and it will fall off your credit report.