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Is there any relief to credit card collection efforts?

Now that readers have survived the holiday spending spree, will credit card debt become more manageable? Not necessarily. 

In fact, a recent article suggests that debt collection efforts are becoming even more aggressive. Those efforts may even culminate in a lawsuit brought on behalf of a credit card company against a debtor. 

This litigation trend started at the height of the recession. According to an analysis of court data in just one county in one American state, lender Capital One filed over 56,000 collection lawsuits between 2000 and 2014, with about 10,000 filed in just 2009 alone. Since there are over 3,000 counties throughout the United States, the massive number of lawsuits that Capital One has brought on a national level against credit card debtors is hard to imagine.

Is there an alternative to a debt collection lawsuit? As a law firm that focuses on bankruptcy and debt management, we know that there are more favorable alternatives than defending against a large corporate plaintiff. In fact, a proactive approach may minimize some of the impact to one’s credit score.

In one example, Capital One prevailed in its lawsuit against a credit card debtor, but the individual had no assets to his name. Consequently, the judgment could permit Capital One to seize money from bank accounts or garnish wages should the individual find reemployment and once again begin to accumulate savings.

Garnishment can make a severe impact, with state laws offering only some protections. Instead of having a sizable portion of one’s wages taken away, an individual might prefer to come up with a more manageable debt reorganization plan in a Chapter 13 bankruptcy filing. Our attorneys can help you explore this option.

Source: PRI, “At Capital One, easy credit and abundant lawsuits,” Paul Kiel, Dec. 29, 2015

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