This morning, the payment to our second charge card has been credited to the account. The account balance is now zero. I wish I could say that this means that the lawsuit by the credit card company is over. However, it is never that simple. There are still legal matters to address before we are free and clear of the lawsuit.
Filing an Answer
In Texas, after you are served with papers informing you that you have been served, you have a limited amount of time to file your answer to the lawsuit. This is something you can generally do on your own. However, it would be better to consult an attorney before filing your answer. Your situation will most likely be different than ours. Therefore, you would not take the same approach. You can find sample answers at TexasLawHelp.org.
Credit card companies, some in particular, will automatically sue you to collect. In some circumstances, they can garnish wages or take some of your property to satisfy the debt. Unfortunately, they are often successful without ever having to go to court. Many debtors don't bother to address the problem or file an answer. As a result, the credit card companies win a judgement by default because the defendant does not bother to show up. At the very least, you need to file an answer, which is a general denial of the charges. This buys you some time.
Courts Don't Mess Around
Again, in Texas, debtors have certain protections. I do not think wages can be garnished. Your home cannot be taken if it is your homestead. And, even your vehicles are safe if they are below a certain value. However, courts have the power to look into your financials and determine if you have any savings, investments, or other assets that can be used to pay the debt.
There is a possibility that you have nothing of value that can be taken to pay the credit card company. If this is the case, your credit record will have the judgement written in it. Anytime you ask for a loan or other credit, the judgement will pop up informing the new creditor that you don't pay debts. You should avoid having a judgement on your credit report, if you can help it.
Trying to Beat the Clock
Now that the cards are paid off, it takes time before the credit card company informs the collections company that the accounts are satisfied. This can take a few days. This is why we still need to file an answer as if we expect to go to court. Otherwise, the credit card company wins a judgement by default even though they got paid.
If all goes well, the credit card company swiftly informs the collections company that the debt is paid. Then the collections company, in this case an attorney, can file a motion to dismiss the lawsuit with prejudice. Then the court will close the case.
If things go slow, then having filed an answer buys us more time for the credit card company to coordinate with the collections attorney to drop the lawsuit.
If We Had To Go To Court
If we were not able to pay the debt, or the collections attorney takes a long time to drop the lawsuit, then the matter would have gone to court. At that point, the only question is whether or not the debt is owed. The court is not looking to find out if you can afford to pay, or not. They are only there to answer the question whether it is a legitimate debt. So, there would no point pleading hardship or any other circumstances that prevent you from paying. These are generally an admission that you owe the debt. Case closed.
The procedure, then, would be to deny owing the debt. We would have to come up with evidence showing that we did not make the charges on the credit cards. Or, we would have to show evidence that we had paid the debt, which would have been on the filed answer too.
Waiting
At this point, we just have to wait for the collection attorney's office to be notified that the debt is paid so that they can drop the lawsuit. I may be able to speed it up by emailing the collection attorney's office a screen capture of the zero balances. Then, they might expedite their process with the credit card. If not, I'll have the answer ready to file by the deadline. This will ensure that they have more time for their back office process to work. It would also protect me from them getting a default judgement. It's all procedure at this point.
No Hard Feelings
After all this is over, I would like to resume my relationship with the credit card company, someday. They offer good credit cards that fit with our lifestyle. Being fans of travel, it is beneficial to have cards that offer rewards for hotels and flights. We only are in this situation because we made the mistake of adding authorized users who left us a large debt that we could not pay in a lump sum. Unlike credit cards, charge cards need to be paid off in full each month. Lesson learned. We are going to try to get the Optima card despite not following the wishes of the collections attorney. Their office may be a little miffed. They won't be able to collect commissions as a result of circumventing them.