Credit card lawsuits may be a bunch of lies

Lately, credit card companies have become prolific lawsuit filers – suing people with relatively small debts to recoup their money. It seems ludicrous – but they are doing it – forcing people to consider bankruptcy. Lately, the lawsuits I see range from a few $1,000 in debt to as high as $500,000. What is remarkable isn’t that they are suing people – but the court they pick. Normally, these matters are conducted in small claims court. In small claims court (“People’s Court”), the cases are cheaper to file, discovery rules are virtually non-existent, and the court dates are easier to come by. Now credit card companies have a new scare tactic  – filing cases in District Court. What’s the difference? When you sue in District Court, it looks more like a “real” lawsuit. A client will receive complicated legal papers with fancy names, a Request for Interrogatoies, Request for Admissions, docket control orders, mediation dates, motion for summary judgment, and other freighting legal papers that make you think you are going to jail. You wont go to jail but if you don’t follow civil procedure, you could be on the hook for a lot of money.

What makes matters worse, a recent report by the New York Times insinuating that these credit card lawsuits may be a bunch of lies. According to the article,  “many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases. Lenders, the judges said, are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers. Judge Noach Dear, a state judge in New York stated “I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt.”

In a bankruptcy, we can still stop the lawsuit from moving forward before you get a judgment. Or been if you got a judgment, you will wouldn’t have to pay the amount. So


Bennett Cunningham is a Bankruptcy Attorney licensed in Texas and is a former Investigative Reporter for the CBS Television Station in Dallas. Mr. Cunningham has garnered 7 Regional Emmy Awards, including the Best Investigative Reporter in Texas 2 years in a row, as well as several National Awards for his exposés into the mismanagement of taxpayer dollars and government waste. Mr. Cunningham is also admitted to practice in the US Bankruptcy Court for the Northern District of Texas and the US Bankruptcy Court for the Eastern District of Texas.  He is a member of the National Association of Consumer Bankruptcy Attorney’s, American Bar Association, American Bankruptcy Institute and the Dallas Bar Association.

This blog is not meant to give you legal advice. If you need to seek legal advice, you should consult a licensed attorney in your jurisdiction.

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