I don't understand this??

Question

How is it that some people who owe on credit cards (behind) end up in court with judgments for small amounts, but on the other hand people who owe several thousand never see a day in court?

Answer 1

hmmmm

Answer 2

It is all a matter of knowing how to handle a situation. One of the problems with getting behind in repayments is that many people do not know what to do about it. A natural tendency is to try to forget the problem and hope it goes away. It does not. When people receive communication from the credit provider about their debt they frequently do not act immediately and put the letter aside. Naturally, the credit provider will then go the next step usually a letter from their solicitor or legal department. Often this makes the credit card holder more afraid to communicate and hence the matter winds up in a court, with judgement against them.

The best solution to any financial problem regarding the inability to pay, is to get in touch with the credit provider as soon as you know that you will be unable to make a payment. Talk to them and come to some arrangement to catch up with the arrears that will occur. Never wait until they contact you, get in first. If you did this and the matter still wound up in court, the magistrate could well be on your side rather than theirs.

Those other people you mention,who owe more but never seem to wind up in court, probably have a better understanding of procedures and how to make other arrangements to repay their debts.

You now mention a collection agency. When the credit provider has passed the matter to a collection agency, it has sold the debt at a heavily discounted rate to the debt collector. These businesses usually know that they have a good chance in court to get a favourable judgement. Most of their cases are the average working class persons in employment and will be able to meet the payments set by the court.

Answer 3

It really depends on which credit card.  Some are much more aggressive than others.  Some, like Capital One, have their own in-house collection dept and are more likely to sue.  

Others just charge off accounts and sell them to third party collection agencies.  It then depends on which collection agency.  Once again, some are more likely to sue than others.

It also depends on where the debtor lives.  The collector has to have a local office or rep to sue.

Answer 4

It's totally up to the creditor whether they think it's worth the effort on a case by case method.  If somebody owes a lot, but there is little chance for recovery, it isn't worth court costs.

Answer 5

It dosn't matter how much you owe.  As long as you can pay at least the minimum payment, you can't be sued.