Credit card companies can offer businesses convenient payment options, but with these benefits come certain risks. One such risk is the possibility of losing a lawsuit to a credit card company. According to Forbes magazine, nearly all significant credit card issuers require the business owner to personally guarantee the credit card debt. Therefore, when you lose a lawsuit to a credit card company, your personal and business assets may be at risk. So, what steps should you take if this happens to you?
Understanding Judgments
The first thing that happens after losing a lawsuit to a credit card company is that the judge will pass judgment against you. This judgment is a legal declaration that establishes your liability for the debt and specifies the amount you owe. By receiving the judgment, you become legally responsible for paying that debt. Additionally, it gives the credit card company the power to claim some of its assets to satisfy the judgment debt.
What Consequences Can You Expect?
Now that a judgment has been made against you, the credit card company may be able to place a lien on specific property owned by your business. This can include real estate and company vehicles.
They may also have the authority to seize funds in your company's bank accounts up to the amount of the judgment. If you guarantee the debt, the creditor may be able to take away funds in your bank accounts, place a charge on your personal property, and even garnish a part of your wages.
How Long Does the Credit Card Company Have to Pursue You?
The length of time a credit card firm has to pursue you for the judgment debt depends on the statute of limitations of your state regarding judgments. This period varies from state to state, but during this time, the credit card company can seek to collect the debt from you. Once this time elapses, the credit card company can no longer seize your assets. However, in certain states, judgment holders can renew the judgment one or more times.
What Solutions Are Available to You?
Given that a judgment can follow you for many years, it's in your best interest to address it sooner rather than later. To avoid having your property seized:
- Consider calling the credit card firm and paying off the judgment debt.
- If you cannot pay the entire amount immediately, inquire whether the credit card company allows you to make installments.
- If you fail to keep to this arrangement, the creditor may opt to seize your assets instead.
The Importance of Legal Help
Navigating this process can be confusing and stressful, but you don't have to face it alone. Enlisting an experienced lawyer's help can provide invaluable guidance and support throughout this journey. They can help you comprehend your rights, assess your options, and work with you to negotiate payment arrangements or explore other avenues to satisfy the judgment. Don't wait until your assets are at risk to take action. Reach out to an experienced attorney today.
