What to do if you’ve been sued by Chase.

If you’ve been sued by Chase (or another credit card company) - Discover, American Express, Bank of America, etc. you must take steps right away to resolve this issue. Too many people ignore it and end up getting their wage garnished. If a credit card company is suing you, most likely, you’re a W-2 wage earner. Most creditors will first run your credit to check your employment status. Their strategy is simple. Get a default judgment, and garnish your wage. In general, under California law, they can garnish up to 25% of your wage.

There are few different approaches to dealing with the lawsuit.

1. Contact the plaintiff’s attorney and negotiate a settlement. You could call the opposing attorney and try to negotiate a settlement. This may not be very effective because they have already spent money and time bringing the lawsuit. Most likely, you’ll have to consent to a judgment against you so that you can repay back the money. If you don’t hold up your end of the bargain and default on payments, they can simply execute that judgment and garnish your wages.
2. Fight the lawsuit. If you have some legitimate defense to the debt (e.g., it not your debt), you could hire a lawyer to defent the lawsuit. You can also hire a lawyer to negotiate a settlement. This will mean hourly attorney fees for your lawyer, and litigation can get very expensive.
3. Explore bankruptcy. There is no tool more powerful than bankruptcy to stop a civil lawsuit in its track. When you file for bankruptcy, there is an automatic stay, which prohibits any further collection activities. Whether bankruptcy is the right decision or not should be explored by consulting with a bankruptcy attorney. Factors to consider are: the amount of debt you have, your ability to repay the debt, if you can qualify for Chapter 7 or Chapter 13.

Do you have questions or need advice about your situation? Contact us.