Credit Card Lawsuit Info: Types of Debt Contracts

Credit Card Lawsuit Info: Types of Debt Contracts

Just when you thought that unpaid credit card balance is left forgotten by your creditor, you are handed a summons and complaint by a junk debt buyer or a debt collection agency. If you are possibly facing a lawsuit and you are unsure what or how you can defend yourself against the charges, it’s best to check your state’s statute of limitations.

The statute of limitations refers to the period in which a debt collector can sue delinquent debtors for unpaid balances. If the statute of limitation is expired, the debt collector can no longer go after the delinquent debtor. However, they can still attempt to collect the debt.

Debt Contracts Types

If you are facing a credit card lawsuit, it’s important to remember what type of contract you signed for. There are three different types of credit contracts:

Oral Contract: This type of contract does not have written documentation at all. Everything about the agreement are set up through oral communication which makes the debt ownership difficult to prove in court once the debt is being disputed.

Written Contract: This contract comes in a form of a written document which are signed by both the creditor and the debtor. In the US, most credit card companies use such contracts to seal the deal with customers.

Promissory Note: This is just as legally binding as written contract and indicates specific details on credit repayment in written form.

Open ended Contract: This type of contract carry various lines of credit such as credit card.

Unfortunately, many debt collectors are now buying old debt account then go hound the debtors with every collection tactic they know in order to profit from these accounts. This is becoming quite a trend that ends up with the debtors being threatened with credit card lawsuit or may go ahead and file one without warning.

Other debt collectors use a different tactic to get debtors to pay up. One of which includes threatening to take off credit ratings if the debtor makes a minimal payment. If you are being harassed by a collection agency into paying for a debt, regardless if the said debt is within or beyond statute, you can file a Cease and Desist letter to inhibit the creditor from contacting you and harassing you and the people around you.

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