Debt collector taking me to court for thousands more than original debt

[gregster]

I am in Texas

I was served a citation to appear in court. I owed a credit card company 600.00 that was written off in 2013. Another collection agency took on the debt 10 months ago and now they are asking for 4500.00. I am waiting to hear back from their attorney, but wanted to know what options I have. I assume the ridiculous increase in what I owe is from legal fees. I am guaranteed to be stuck having to pay this crazy amount?

 

[adjusterjack]

Probably.

1 - Credit card contracts have bilateral attorney fee provisions which means loser of a lawsuit pays the winners attorney fees.

2 - That the debt was written off is only an accounting thing that allows the creditor a tax write off. The debt is still collectible.

3 - If you read your credit card account holder agreement you'll find that late fees are horrendous and the default interest rate could be around 30% which means that the pure debt could be up close to $2000 plus attorney fees that have already been earned and will be earned when it goes through the court process.

Options:

Pay what they say and get the case dismissed.

Negotiate a lump sum discounted settlement and get the case dismissed.

Go to trial (or ignore it) and end up with a judgment.

Fortunately Texas doesn't allow wage garnishment so you have a little bit of leverage to offer a settlement.

Consider bankruptcy if your debts are overwhelming.

By the way, the SOL is 4 years. So, whether the suit is timely depends on the date of your default or the date the credit card company wrote off the debt. I recently read some case law that allows the SOL to start running as of the date of the write off instead of the date of the default.

What, exactly, is the plaintiff alleging in the complaint?