I was approved for two credit cards from XXX, both obtained to purchase a TV in October of 2007. One card was around a $1,000 limit and the other card was around a $500 limit. I had to get two credit cards to afford the total cost of the TV and a warranty. I lost my full time job soon thereafter and fell behind several months on payments. When I got a part-time job in July of 2008, I went to pay off some of the amount on the bigger credit card. The online payment service was suspended. I lost my part-time job soon thereafter thanks to a lay-off, and haven’t made any payments on either credit card. I received one or two letters from the debt collectors and didn’t think I would be sued. Well, it turns out I that I am. I know I’m an idiot for getting myself into this situation, and I know I owe them the money and have to pay it back. I owe $X and have have about three weeks to file a written answer with the court and serve a copy on the other party.I’ve never been sued before. I’m not sure what to do next. I’m 22 years old and have no idea how big of a mess I’ve gotten myself into. I’d like to avoid court if at all possible so I don’t have to pay their attorney fees, but I’m guessing that it may be too late. Where do I go from here, and is it possible to avoid a court case?
A person in your situation could stay out of court by contacting the opposition and entering into a settlement agreement, by filing for bankruptcy, or by abstaining from attendance at a court hearing. If you choose to attempt a settlement, you could write the opposition a certified letter explaining your financial situation and offering to pay a sum certain that is a lump sum or installment payments. Explain that they are not going to get anything more out of you considering your financial situation (that you have no assets or income from which to collect) and the fact that you may be forced to file bankruptcy. This should give you some leverage.
If you file for bankruptcy, no creditor may contact you further, all court proceedings would be stalled and under normal circumstances, your debt would be wiped away.
If you do not attend the court hearings, the creditor will obtain a judgment against you. With a judgment in hand, he can now attempt to collect on the judgment by garnishing your assets / income. If you have no assets or income and continue to keep all assets or income out of your hands, the creditor will have a hard time getting the money from you. See articles that discuss garnishment and judgments within the Debtor/Creditor category.
It is unclear to me whether you have been sued, that is, whether a complaint has been filed and served upon you. If this is so, typically, when a complaint is filed against a debtor, the debtor will file and serve an Answer denying liability, then enter into settlement negotiations. If an Answer is not filed and served, then the creditor will procure a default judgment and the process will proceed as indicated above in the situation in which you did not attend court hearings.