Why making a payment on an overdue card debt won't help

When sued for an unpaid debt, making a payment is a bad idea

Fred O. Williams
Senior Reporter
Expert on consumer credit laws and regulations.

lawsuit for collection

When you are sued for unpaid debt, making a payment is the exact wrong thing to do.

Once you have received a summons or other notice of court action about the debt, the gloves have come off.

At this point, consumer lawyers say, it doesn't make sense to make a payment – unless it is part of a debt settlement, backed by a written agreement.

"It's a bad idea to do that," said Rex C. Anderson, consumer attorney in Michigan.

It seemed like the right idea to Marie, a Pennsylvania resident with a delinquent credit card debt of $1,700.

"Since I received the summons, I made a payment of $100 toward the balance and contacted the bank that issued the card," she said in an email to CreditCards.com. Along with her check, Marie sent a letter explaining she'd been unable to pay because of unemployment, and asking to drop the lawsuit. "I have not heard from them since then," she wrote.

Said Anderson, "The creditor has no obligation whatsoever to say, 'Oh, I just got $100, I'll dismiss the case.’"

See related: Taken to court for card debt? What to expect and how to respond

How making a payment following a summons hurts you

It's understandable that stopping the lawsuit is the first thing on your mind – but according to consumer lawyers, there are several reasons not to make a payment at this stage.

  • Making a payment restarts the statute of limitations clock running on the debt. In Pennsylvania, for example, a creditor can't sue after a debt has gone unpaid for four years. But a payment made by the consumer restarts the four-year expiration period.
  • It undermines your defense of the debt. If the original lender sold the debt to a debt buyer, there may be discrepancies about the amount owed. Even the debt buyer's right to collect from you may lack supporting documentation. But a letter apologizing for not paying will undercut those arguments.
  • It reduces your leverage to settle the debt. To avoid court, the creditor may accept a significant reduction in the full balance due. Payments made outside of such an agreement reduce the full balance, but fail to achieve a discount.

"If she owes the debt, nothing stops the suit unless she can come to some agreement on payment with the collector," said Brian Dell, a consumer lawyer in Oklahoma City.

DIY court action for consumers

Like many people with credit card debt, Marie said she is trying to avoid court, and doesn't think the expense of hiring an attorney will be worth the results.

"I cannot afford an attorney on my own," she wrote, "and my credit card debt is relatively low as compared to what others owe."

Although it is daunting to think of representing yourself in court, consumer attorneys said it is possible in debt collection actions.

The first step after receiving the summons, complaint or other notice of the lawsuit, is to file a formal answer. Sending a letter doesn't help.

"That's a prescription for getting a default judgment," said Robert Salvin, a consumer attorney in Philadelphia.

  • A default judgment is entered against you if you don't present a defense.
  • It allows the creditor to collect from your paychecks, or even your bank account, without proving their case in court.

How to answer a court complaint

According to lawyers, this is how to answer a court complaint:

  • The answer to the complaint should ask for proof of the debt, the amount owed and the collector's right to get the money. 
  • The answer is filed with the court, and a copy is sent to the creditor's lawyer. 
  • The answer should respond to each claim the creditor makes in their complaint.

Claims from debt buyers – such as Midland Capital and Portfolio Recovery Associates – can be on shaky legal ground to begin with.

"Often the documentation is lacking," Anderson said. "They don't get all the documentation when they get [the debt.]" Answering the complaint is a signal that you are willing to present a defense, which may lead to a settlement that lets everyone avoid court.

The first step after receiving the summons, complaint or other notice of the lawsuit, is to file a formal answer. Sending a letter doesn't help.

Is bankruptcy an option?

What about bankruptcy? Marie said she was trying to avoid that route as the debt was relatively small.

But Robert Stempler, a consumer attorney in California, said that the total debt load should be considered, including debts that are not yet in default.

"I find out if the debtor has other debts and the total amount of the debt, as they may very well qualify and be well served by filing for bankruptcy," he wrote in an email interview. "This will stop the lawsuit and discharge many if not all of their debts."

The National Association of Consumer Advocates can help you find a lawyer, and also provides resources for do-it-yourselfers, including videos aimed at people representing themselves in debt collection cases.


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Updated: 12-10-2018