There is a credit and economic crisis in the United States and the chances that Congress will bail you out, and stop creditors from suing you are pretty small. There are some techniques to consider if you are sued or threatened by a credit card issuer.

First and foremost, get an attorney’s advice. If you had severe chest pains, you wouldn’t call your Aunt Sadie or the check out lady at the supermarket or your closest friend in the whole entire world, your hairdresser, to perform open heart surgery. Second, the discussion that follows is general and based, primarily, on Florida statutes and law. Nothing is a substitute for the personal advice of a local attorney, familiar with your entire situation and the particular laws of your jurisdiction.

As a result of the credit problems and the poor economy, more and more creditors are suing or threatening to sue folks with balances due on credit cards. If you are sued because of a failure to pay a credit card bill or a car loan or, worst of all, your mortgage, there are some practical things that should be considered.

Most of the time, if a debt is owed to a credit card issuer or a department store, the creditor will not sue. There will be nasty letters, suggestions that your credit will be irreparably destroyed and several letters; you may get telephone calls – but that’s probably all. It costs the creditor too much to sue, unless the amount is huge and there is a good likelihood that you really could pay the debt if you really wanted to.

Instead, the bank or store will likely “write off” the debt and, while that action is reported to the credit bureaus, nothing may happen for months or even a year or two. Sooner or later, the creditor will bundle up a bunch of these claims and sell them to a collection agency which specializes in collection. Here’s the catch. The original claim may have been $750, interest and late charges may make the total $1500; the creditor sells the claim for something like $40 or $50, hoping for a big profit and if you pay the $1500, the agency has done very well indeed!

So, you may be able to settle the $1500 claim for $100 or less!

There are possible pitfalls and this is why you need a lawyer.

Often because of the way these claims are gathered together and sold, much documentation gets lost along the way. The company suing you does not have, or never had, all of the documentation that is necessary to bring suit; they depend on your fear of litigation and your failing to obtain good legal representation. Among these documents are the original credit card agreement you signed long, long ago, the credit card statements showing the history of the account and how the charges are computed and the contract or assignment that evidences the purchase of the claim.

Your lawyer will demand production of these materials and, quite often, the collection agency doesn’t have them and the original creditor does not want to take the effort to search. The result may be an even lower settlement.

Now the possible pitfalls have to be remembered.

There are, in all the states, something called a Statute of Limitations. The period involved may be different in each state but the Statute gives creditors a specified period of time within which to sue. In Florida, for example, a creditor has five years to sue after the bill is incurred, the statement sent or the last activity on the account. This is a very simplified explanation of a very complicated set of rules and, again in Florida, the Statute of Limitations can and will be suspended if, among other things, you start making payments, enter into a written agreement to pay off an otherwise barred claim, move out of state, hide or do other things that show you to be sneaky! Again, depend on the advice of your lawyer and never, never, never sign any acknowledgement of an old debt without getting legal advice.

If your case is dismissed because of the age of the claim or because the creditor does not have the necessary documentation and, as is the usual case, the credit card agreement provides that you are liable for attorney fees if the bank (or the collection agency) has to sue, under §57.105(7), Florida Statutes, then the bank or agency may have to pay your lawyer! This has to be specifically requested, but again, your attorney will know what to do.

Bottom line is not to panic and get yourself a good lawyer.