What affect does being sued by a credit card lawsuit have on your credit report? Credit card lawsuits are not reported, per se, on a credit report. The debt upon which the lawsuit is based is probably already on your credit report. If the lawsuit is filed by a debt buyer, how it is reported is a little more complicated. The original credit card company, such as Chase or Citibank, may still report the history of your credit card payments but if it has been sold to a debt buyer, it should show the balance of the account owed to be $0. The debt buyer may report the debt on the credit report and may report the actual balance due on its entry. If they both report a balance due, that is in error and you should sent a written dispute to each of the three credit reporting agencies and request it be corrected.
How long may a debt be reported on your credit report? Seven years from the date of last activity. Many times it is measured by the date of the last payment made on the account.
If your credit card has been charged off, does that mean you no longer owe the debt? No, charging off the account has nothing to do with your liability on the debt. Charging off is an accounting mechanism credit card companies are required by law to make once the debt is no longer a performing asset. In other words, if you are not paying the credit card account, after a certain period of time it is not an asset to the company and should be reported as a loss or “charged off” their books. You still owe the account.
How long does the credit card company or debt buyer have to bring suit against you? In Texas, the statute of limitations for suit on a debt is 4 years. There are some promissory notes that have a 6 year statute of limitations. It is possible that a debt may be past the statute of limitations for suit being filed but still be reported on your credit report – it may be reported on your credit report for an additional 3 years.
If a credit card company obtains a judgment against you, most likely the company will obtain an abstract of judgment, and file it in the county records. Such a filing will eventually show up on your credit report. If you are sued in Dallas county or a surrounding county, and obtain representation, there are many defenses to such suits, especially if it is a debt buyer. Often a debt buyer will dismiss a lawsuit if a knowledgeable consumer attorney enters an appearance. A dismissal of the credit card lawsuit will not have an effect on how the account is reported on your credit report. If the case proceeds to trial, however, and you win, you may obtain what is called a take nothing judgment. A ruling will have been made that no debt is owed. You may send a copy of the judgment to the credit reporting agencies and it should change the credit reporting of the debt on your credit report.
If you are sued by a credit card company or debt buyer in Dallas County or a surrounding county, your chances are improved if you hire an experienced consumer attorney to represent you.