Most credit card lawsuits begin with a series of missed payments. High interest rates, loss of income, and unforeseen circumstances are the most common situations which lead to the filing of a lawsuit. You may be familiar with commercials which offer debt relief programs, where the customer pays “one low monthly payment” to resolve their debt. The late-night commercials will often make your financial situation seem like it can be easily resolved. Sounds like an excellent option, right? Unfortunately, these programs do not provide legal representation and can often create more problems than solutions.

Debt relief programs will negotiate your debt, but they will not represent you in a lawsuit. I will often hear a defendant say that he/she hired a debt relief program, and the current lawsuit is included in the monthly payment plan. In most cases, a credit card company may still file suit against you even if you are current on your payments to the debt relief program. The case can arrive at a judgment where you risk wage garnishment, a frozen bank account, as well as liens against your property. This may seem a little off, but the credit card companies are in the business of collecting from you and not working with you.

Furthermore, debt relief programs function as, what I like to call, an “informal chapter 13 bankruptcy.” The customer is responsible for making payments, just like in the Chapter 13 repayment bankruptcy. However, it is very important to note that the debt relief customer does not have the same protections as bankruptcy. One of the most important differences relates to the “automatic stay.” This is a very powerful tool which “stays” or stops collections lawsuits upon the filing of a bankruptcy case. The client in bankruptcy does not need to worry about their credit card lawsuits so long as they are making their monthly payments for their bankruptcy. On the other hand, a debt relief customer continues to risk lawsuit as they are not under legal protection.

To avoid the stress and worry of being sued, you should consult an experienced debt defense attorney who can handle every aspect of your lawsuit. The attorneys of Holland Law have significant experience in consumer finance and debt. Our clients are protected from the creditors as we work to reach favorable outcomes in every case. If you are considering a debt relief program, please give our office a call for a free consultation.