Prevost and Shaff

I have been sued by my credit card company. What do I do?

Just because you have been sued does not mean that the credit card company or other creditor will be awarded a judgment against you. The first thing you should do is have our Texas Consumer Defense Attorneys review the lawsuit immediately and provide you with sound legal advice regarding the suit. If you wait to long and do nothing you may jeopardize your rights to a defense.

Generally, how much time do I have to respond from a lawsuit?

The document in which you were served, the lawsuit, will provide an explanation concerning the time period in which to file an Answer or to make an “appearance.” These type of cases are most generally filed in Justice Courts. In these courts you will have to file an Answer on or before 10:00 a.m. on the Monday next following the expiration of 10 days. In County or District Courts, you must file an Answer on or before 10:00 a.m. on the Monday next following the expiration of 20 days. As you can see, it can be quite confusing determining the exact date on which to file an Answer. There are two other factors we consider at Prevost and Shaff that are advantageous to you when calculationg the answer date; so our advice is to allow our expert law team to examine your legal document and provide expert advice.

What are the risks if I fail answer the lawsuit within the legal timeframe?

If you fail to Answer within the required timeframe, you are at risk of having a default judgment entered against you. A default judgment is a finding of damages and liability agains you, which simply means the creditor has prevailed and won. Default judgments can often be overturned or “set aside,” but not without some risk and expense. Depending on the type of court your assigned, your time to try to overtun the default judgment could be as little as 10 days after the judgment has been signed. Just because you may be successful in setting a default judgment, does not mean that you will win; all it means is that you get to start all over. In short, it is best to avoid a default judgment.

What can experienced consumer defense lawyers at Prevost and Shaff do for me?

Great question! Just picking an attorney out of the air is not a good plan. There are good attorneys that handle contract cases but have not handled credit card cases. We know the terms and conditions assessed by credit card companies. We are able to assess our defense based on this knowledge and experience and determine whether a creditor has complied with the intent of the law.

Where will I get sued?

Most credit card terms and conditions contain a “choice of law” clause. This type of clause dictates which state laws are applicable to any dispute on the account. For example, Citibank’s choice of law is South Dakota and MBNA’s choice of law is Delaware. Some states like South Dakota, have very liberal lending laws and can charge interest rates much higher than those allowed in states such as Texas. The United States Supreme Court has ruled that the state in which the lending decision was made is the home state for purposes of imposing interest rates. No coincidence that there are few credit card companies whose home is Texas, where the maximum interest rate is 24%!

Timeframes --- how long will it take to settle my case?

A lawsuit in Dallas County, Texas and surrounding counties generally can take eight to 12 months to get to trial. However, resolution can occur at anytime. Lawsuits therefore can drag on for quite some time. We will begin your case by discussing a strategy as well as provide a scope and timeline of events. Activity in most lawsuits occurs in waves. A lawsuit pretty much is project driven and has elements of the case that are time sensitive. We will discuss the probable time on our initial consultation after we have reviewed your legal document in which you were served.

What are my chances of winning my lawsuit?

It is the creditor’s job to prove its case by a “preponderance of the evidence.” That is, “is it more likely than not that the creditor is right.” That is usually done by the creditor producing documents and/or providing testifying witness at trial to prove its case against you. Our job is to determine the chances of the creditor proving its case at trial and to then counsel you accordingly whether we should pursue a settlement or go to court. Generally, how well the creditor believes it will do at trial will dictate its desire to settle at a reasonable amount.

What if I cannot settle because of a lack of funds?

Texas was founded by debtors and remains a state with very liberal laws in favor of debtors. In Texas, your homestead cannot be taken from you to satisfy a judgment. A creditor cannot take your wages or qualified retirement accounts or government entitlement. Your cars are generally exempt from taking a judgment creditor. If you have no non-exempt assets, a judgment is not likely to affect your standard of living. Granted, a judgment will be reported on your credit report and may hinder buying or selling real estate, but it should not deter you from living a pretty normal life. Should your financial position change you should be able to approach the creditor and work something out.

What if I desire to settle and avoid the risk of a trial, what are my options?

Obviously the best way to minimize risk is to settle out of court. When you settle, you “buy peace.” “Buying peace” is a subjective term, because the reasonable price for peace is different for each individual. If you are generally a risk taker, your peace purchase price may be very low while someone adverse to risk may be willing to pay more to escape trial. The issue is not to get caught up on a percentage of the settlement but to determine what you believe to be fair and affordable.

What are usually the terms of a settlement?

There are some settlements that include terms. For example, a creditor may allow you to pay the settlement over a specified period of time. If that is the case you will enter an “agreed judgment” that will be in effect for the term of the settlement agreement. An “agreed judgment” is a judgment wherein the parties agree to the terms as opposed to a judment where someone wins and someone loses. The “agreed judgment” will be filed with the court and will be a public record, but the creditor will not try to collect based upon the judgment unless you breach the settlement agreement. Upon completion of your payment arrangements, the judgment will be dissolved.

If you can afford to pay the settlement in a lump sum, the lawsuit will be dismissed whtn the settlement funds clear and you will escape having a judgment filed against you. As you can see, it is better to pay the settlement in a lump sum to avoid the filing of a judgment.

Settlement can also include language concerning reporting the nature of the final resolution of the account. This is where a competent attorney will make certain the proper rating and language is agreed in the settlement.

We can accurately determine that getting sued is not a walk in the park, but it doesn’t have to be a source of angst and frustration either. The experience of Prevost and Shaff in regards to credit card debt should enhance your chances of an acceptable resolution to your lawsuit. Contact us today and will be able to assess the strengths and weaknesses of your creditor’s case against you and counsel you accordingly as your attorney.

Or feel free to call our office at:

(972) 239-6200