How Can I Settle My Credit Card Debt Before Going to Court in Texas?

Have you recently been sued for credit card debt in Texas? You may wonder, “How can I settle my credit card debt before going to court?” It is understandable to feel uncertain about what to do and overwhelmed at the thought of dealing with litigation. Below, our Texas debt resolution lawyers offer tips for handling a credit card lawsuit and discuss how to settle credit card debt before going to court. 

If facing a Texas credit card lawsuit, we recommend working with a debt defense lawyer. An experienced attorney can help you navigate and handle every step of the legal process and negotiations. Your attorney can protect your best interests and help you reach a favorable case outcome.

Always File an Answer to the Debt Collection Lawsuit

If your creditor or a debt collector has filed a lawsuit against you, your first priority should be filing an Answer. An Answer is a formal response to the complaints against you that you file with the court and send a copy to the party suing you. 

Even if you plan to settle, or have already started negotiations to settle, file an Answer before settling. Why? It protects you from a default judgment and gives you more time to work out a settlement plan. 

The creditor or debt collector could still request that the court grant a default judgment, which may occur if you do not respond to the lawsuit or appear in court. With a default judgment against you, you would legally owe the total amount of claimed debt. The court may also award the creditor or debt collector other fees, such as interest, court costs, and attorney’s fees. The debt collector could pursue bank garnishment, property liens, or property seizure to recover the money.

It is important to act quickly because you have limited time to file your Answer. For example, you have 20 days to respond in Texas county and district courts. In justice courts, you only have 14 days. 

Do Your Research and Verify the Credit Card Debt

It is essential to understand who is suing you and ensure that the alleged debt is legitimate and accurate. If your creditor is suing you, you should be able to look at your old statements and records to determine the debt’s validity. However, if a third-party debt collector is suing you, you should send a letter requesting validation of the debt. 

A few examples of matters you should assess and verify include:

• Statute of limitations. In Texas, creditors and debt collectors can only pursue litigation for debt collection for four years. If the statute of limitations has expired, the debt is time-barred, meaning you cannot be sued over it.
• Debt ownership. Do you actually owe the debt, or is this a case of mistaken identity or identity theft? 
• Right to collect. Can the debt collector prove that it purchased the debt from your original creditor and has the right to collect it from you? It is also common for debts to transfer ownership many times. If this is the case, the debt collection company must provide a paper trail and proof of ownership.
• Amount of debt. It is not uncommon for the alleged amount of debt to be inaccurate. Ensure that the claimed amount of debt matches your records.

Consider Your Settlement Options

Thoroughly assess your financial situation to determine what you can realistically pay to settle your credit card debt. Knowing what you can afford can give you a starting point for negotiations. Generally, a settlement agreement includes either a lump-sum payment or installment payments with a repayment plan. 

If you can handle a lump-sum payment, the debt collector may be willing to accept a lower payment in total satisfaction of the debt. Debt collection companies typically buy debts for pennies on the dollar, so recovering a lump-sum payment allows them to profit and avoid the risks of consumers defaulting on repayment plans.

Make the Debt Collector Show Its Evidence

After filing your Answer, if the court allows, you can engage in discovery. This process requires both parties to share relevant documents and information about the lawsuit. It is a strategic move to get the creditor or debt collector to show its evidence against you. 

Any gaps or inaccuracies in its documentation, such as the chain of title documents, may not necessarily win the case for you. However, it may put you in a better position to negotiate a more favorable settlement deal.

Do Not Be Afraid of a Trial Date

We understand that you want to avoid a trial. However, do not be afraid of a trial date. It is important to understand that the debt collector also wants to avoid going to court. Litigation takes time, money, and resources for both parties. Litigation also does not guarantee a win for the debt collector. Therefore, it may be more willing to settle to recover at least a part of the debt.

A trial date may help expedite negotiations and force the debt collector to negotiate its best offer. A trial date also gives you more time to save for a settlement.

Make a Settlement Offer

At this point, you have protected yourself from a default judgment, validated the debt, put pressure on the debt collector, and considered your settlement options. If negotiating a settlement is in your best interest, consider making a written offer to the debt collector. Expect the debt collector to counter-offer, so give yourself room to negotiate by starting low.

Keep in mind that settlement negotiations may take some back and forth to reach an agreement. Ensure you get a legally valid, written agreement to protect yourself against future complications or collection attempts on the same debt.

How Warren & Migliaccio Can Help You Resolve Your Credit Card Lawsuit

At Warren & Migliaccio, we help individuals all over Texas defend, settle, and resolve debt collection lawsuits. If a creditor or debt collection company has recently sued you, we welcome you to contact us. 

A few of the ways we may be able to help you include, but are not limited to:

• Preparing and filing your Answer with the court and sending a copy to the creditor or debt collector
• Preparing and sending a debt validation letter to the debt collector
• Investigating the claims against you
• Finding strengths and weaknesses in the debt collector’s case
• Determining your best legal options, whether that is defending yourself in court, pursuing a favorable settlement, or exploring other options
• Negotiating with the debt collector on your behalf and helping you reach a settlement that works for you
• Challenging the lawsuit and representing and defending you in court

Schedule a Consultation With Our Texas Debt Resolution Lawyers

If you are facing a credit card lawsuit in Texas, we encourage you to contact our Texas debt resolution attorneys. We are happy to answer your legal questions, review the claims against you, and discuss your best legal options for resolving the lawsuit. Call us at (888) 584-9614 or submit our online contact form, and we will contact you soon.