Can a credit card company that you are in dept for hire a lawyer. take you to a magistrate and threaten to take personal belongings when it is an unsecured credit card?
3 Answers from Attorneys
Can a credit card issuer sue you if you are delinquent? Yes. Can they legally enforce any judgments entered? Yes. So it is not a "threat" if they are asserting their legal rights to pursue legal means to collect and enforce.
There is no exemption in PA for real property, a motor vehicle or household goods. The exemptions are limited to: a Bible, sewing machine, clothes or work uniforms. Also many types of retirement benefits (like Social Security or 401(k)s/IRAs) are totally exempt. You also can have up to $300 in any one bank account.
Most creditors do not want your stuff. There is no market and no value to used furniture and household goods. Creditors want cash and since there is no wage garnishment in PA for a credit card the easiest place to look is your bank account. So if you get sued, I would take steps to protect money in the bank. The next easiest place is items like your car or land that are owned free and clear. Older high mileage cars or cars that are financed or owned jointly are probably safe. A home owned jointly with your spouse or a home that is mortgaged would also be safe from seizure.
All of this said, the creditor may or may not have violated the PA Fair Credit Extension Uniformity Act. Unlike the federal fair debt collection practices act which applies only to debt collectors, the PA law applies also to original creditors.
Its impossible to know exactly what was said just based on your post and whether there truly was a threat or just advising you of the collector/creditor's lawful right to sue and enforce any judgment. If you have concerns and definitely if you are sued, you should consult a PA consumer litigation/credit defense attorney.
Since you mention small claims court, I take it that you have a relatively small debt. In such case, have you considered resolving the debt rather than worrying about possible consequences if a judgment is entered? The time to act is now. If you have a lot of debt, maybe dollars would best be utilized by filing bankruptcy. If you are older and have no assets, maybe you are what is known as "judgment proof" and you do nothing at all. Or maybe you start thinking about how to resolve this debt outside of bankruptcy and court.
Depending on your circumstances (income and assets), the identity of the creditor, the balance owed, the stage of the legal process, it may be possible to settle the account for as little as 15% or as much as 100%. Most credit card issuers will settle for between 20% and 40% pre-lawsuit and 50% to 80% post lawsuit though based on my experience. Do you have around 50% of the funds owed on the debt now? If not, how long would it take you to acquire them? Debts can be resolved at any time - either before a lawsuit, after a lawsuit is filed or even after judgment.
If you think you might be interested in a non-litigation non-bankruptcy solution, please email me at [email protected] Purely email consults are free; I charge $50 for a 30 minute phone chat.
I doubt very much that a credit card company made those threats. It had to be a collector. You have two issues to look at. The first is whether the debt has been sold to a junk debt buyer. If it has, then do not pay it. Defend, defend, defend. The second issue that you need to look at is whether the collector committed a violation of debt collection laws. Contact a Pennsylvania consumer attorney, whether its my firm or another, most of us offer free consultations.
Do not make any effort to settle this claim until you speak to a consumer attorney. You may settle a claim that you shouldn't, or, you may think you settled a claim but you really didn't. Again, most consults by consumer attorneys are free.
Of course they can, but there are almost always legal defenses based on deficiencies in the filing that can get the case against you dismissed. You should consult an attorney who is experienced at defending credit card suits asap.