Debt Collector Threatened to Sue Over Credit Card Balance

Reader Question: My daughter got a call from her Credit Card company's Debt collectors, saying if she doesn't pay her full balance by the end of the month of April, they are going to take her to court. She hadn't been able to make a payment in about six months. She told them she can give them a thousand dollars on the account, and will work with them to make payments, they said they can't, as the credit card company is very strict, and wants the entire 2,500.00 by April 30th, or they will take her to court, and she will have to pay the court fees.

Is there anything she can do. Coming up with 2,500.00 in just a few days, is just about impossible. She took a thousand out of her 401k, but the debt collector said that's not enough, they want it all.

Our Response:

Your daughter signed a contract when she applied for the card. The contract states (in some form or fashion) that she is obligated to pay her debts on time. So yes, your daughter is obligated to pay and can be sued if she does not. If I borrowed money from you and refused to pay it back, you want to have some kind of legal recourse, the same way the credit card company does.

Every debt-collection agency has different practices, and I certainly don't know the full story about this particular scenario. Some are willing to allow payment plans or credit card debt settlement, while others demand payment in full. Some are more aggressive than others, as well.

Of course, if the debt collector is calling or writing to threaten her with a lawsuit, as an intimidation tactic, then they are violating the Fair Debt Collections Act. A debt collection company cannot harass a debtor, nor can they threaten to sue in order to coerce payment. The collection agency can sue, legally speaking -- they just can't use it as a threat or an intimidation tactic. If you feel this is what's happening, I would contact your state attorney general's office ASAP.

I also recommend reading this article:
Being Sued Over a Debt - Know Your Rights

Hope that helps. Good luck.