Being sued by credit card company - is this a good deal?

Question

The origional amount of the card was about $500.00. With interest it has skyrocketed to a little over $1000.00.

They currently have a case against me and informed me if I pay 85% of the current balance (about $900.00) they will dismiss the case.

Should I take this settlement?

Answer 1

First of all this would depend upon WHO is holding the debt.

Contrary to what some say the Fair Debt Collection Practices Act DOES NOT apply to major credit card banks?   It applies only to the collection attorneys and professional debt collection companies they might hire. Original creditors are regulated by state law; however, the major credit card companies follow policies that closely mirror those of the FDCPA and will comply with your request to stop phoning you at home and work, etc., just as if you were dealing with a collection service. If you believe you have been harassed by an original creditor, or that the original creditor has done something illegal or threatening towards you, then research your state laws on the subject and contact the proper authorities to file a formal complaint. Typically, the Attorney General in your state is the proper authority to contact.

Here is a link to find your states AG

http://www.fair-debt-collection.com/atto...

If this suit is being pursued by a third party agency then the FDCPA rules would apply.

Answer 2

well first of all, let this be a lesson not to play around with credit cards, but it is probably a good deal when you look at the price of a lawer and, things like that on you record make it a lot harder to get a good paying job in the future, so yeah go for it...and dont make the same stupid mistake next month!

Answer 3

Spiff is correct.  

Remember my rules: Never believe a collection agent.

It is very common for a collection agent to lie and tell you they are going to sue you.  That is why Congress included a portion into the Fair Debt Collections Act that states a collection agent can not tell you he will do something he has no intention of doing....such as suing you.  

At this point you are playing chicken. Both of you are on a collision course....and you are waiting to see who jumps first.  

As Spiff said, collection agencies rarely file lawsuits for debts under $500...and only when they reach $2000 do you need to worry.  But if that agency is located near you, that will increase the chances.  

So based on that...if you have not been served yet, play a game of chicken.  Offer him 60%.  If he refuses, send him a demand to validate letter.  I find it difficult to believe that interest and penalties have added this much to your debt.  He's obviously padding it.

Answer 4

You say they have a case against you, have you been served with papers to apear in court? If not, they are bluffing.

It cost money to actually sue people and most credit card companies will not sue for this small of a amount.

If you actually have been served then I would take the offer since you will lose if you go to court.

If on the other hand you have not been served, I would make a counter offer of around 60%-65% and just tell them that's all you can come up with.

If they accept be sure to get it in writing before you pay them.