When nonpayment lands you in court
Not showing up for a court dates means they win
To Her Credit
Dear To Her Credit,
I am being sued by my credit card company, and I have to appear in court. I don't know what to do. I've been unemployed for over two years (although I just interviewed for a great job, so I'm keeping my fingers crossed). I have no money to pay this with.
I called the bank a couple of times and told them my situation, and that I would start paying again when I got a job, but I didn't get anywhere with them.
This all started a couple of years ago when I got a credit card with a $500 limit. I spent the $500, but then I lost my job when my workplace closed, and I couldn't make the payments anymore. With interest and late fees, my balance in two years has gone from $500 to almost $2,500 without me spending another dime.
Can they really charge me that much? What can I do? Is there any point in going to the court date? -- Lori
Yes, absolutely -- you must attend the court date. The most important reason is that if you don't appear in court, the credit card company wins by default. Assuming the debt is correct, that may not seem like a big deal. But the additional fees and the means they can use to collect their money are still in play.
The other reason to go is that you'll feel better after you do. Speaking from experience, there's something about hiding out from our problems that makes them grow larger in the night. Facing problems in the daylight is the only way to shrink them back down to size and eventually get rid of them altogether.
Going to court can sound intimidating. We've seen court scenes on TV, with a formal courtroom, a judge wearing a robe, witnesses and all eyes upon the defendant. This isn't anything like that. Chances are, you'll meet with a representative of the bank in a plain room at the courthouse. Anyone you happen to see has troubles of their own and isn't even curious about what you're doing there. It's not that the courthouse is a cheery place. It's more on the level of going to the department of motor vehicles -- boring, all business and soon to be over with.
After you're sworn in, you'll have to fill out more paperwork and answer questions. The bank is looking for money, especially wages. You don't have any, and they can't garnish unemployment benefits, so for now the debt is uncollectible and on hold.
The bad news is that yes, they probably can charge you that much. It's not unusual for a credit card bill to double or triple when late fees and penalty interest rates start piling on. This is why it is so important to keep up with minimum payments on credit cards. The minimum payment on a $500 balance was probably between $15 and $20 per month. That's a small price to pay to avoid harsh penalties like these.
If you have any other debts, especially if they are in danger of going the way this one did, I recommend you find a nonprofit credit counselor immediately. Some people avoid counseling because they think it's just about budgeting, or they assume they don't have enough income to work with. But a good credit counselor could probably have stopped this from going to court and racking up legal fees. At this stage, a counselor can help you see your options, make the best use of what you do have, and keep you from getting further into trouble. Be sure to use a reputable agency affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.
Sometimes showing up is the main thing in life -- and the hardest. I hope it goes well, and that soon you get the new job you want. Best of luck!
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Published: October 29, 2010
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