Credit Infocenter

I’m Being Threatened with a Credit Card Lawsuit

January 25th, 2011 · 6 Comments · Legal Stuff

by Kristy Welsh

(Last Updated On: May 7, 2015)

Q. I owe Capital One $8,000. I have been contacted by Nelson, Watson & Associates to collect on my Capital One debt. I offered them $2500, more than 25%, but they rudely refused and said they want payment in full. They also have threatened to sue or take me to court.

My husband was unemployed for 6 mos. and we were financially struggling to pay our creditors. I am a homemaker with no source of income. I have 4 other credit cards solely in my name. They all have been charged off as bad debts. On an unsecured debt like this, what can they come after? I have no wages to garnish since I am not employed. Can they legally sue my husband or go after his assets if the debt was not in his name? I would appreciate your advice.

A. I’m sorry you’re in this situation. It can’t be fun, especially since you’re really not to blame for the situation.

You didn’t say if this debt had recently been charged off. I’m assuming that is the case, since the collection agency is unwilling to settle with you. Most of the time a collection agency has had the debt for 6 months or more before they are willing to talk collection. I recommend that you send them a “cease and desist” letter, where you request no more contact with you. This is your right under the Fair Debt Collection Practices Act. You may want to see an example of the cease and desist letter.

You offered them the right amount, in my opinion. Most collection agencies buy their debt at pennies on the dollar, typically 2-5 cents on the dollar. Offering them 25% is generous.

As far as can they sue you for the debt? Sure they can. Can they sue your husband? It depends on if you live in a community property state. In a community property state, all debt and assets accumulated in a marriage are divided 50-50. So if you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin, the only community property states in the U.S., your husband can be sued along with you.

A lawsuit does not target a specific asset; it only goes after a dollar amount. I don’t know how much the law firm knows about your personal finances, though it’s easy enough to for them to get a general picture through all kinds of sophisticated software available today. Based on recent reader experiences, though, having no assets does not prevent a collection agency or a law firm acting from suing a consumer over a debt. I’ve seen lawsuits filed for as little as $1500.

If for some reason the law firm does sue you and they win, they are going to get a judgment. If they do get a judgment they can garnish future wages or get a court order to seize funds from your bank account. However, winning against you is a big if. You can defend yourself in court and win, either by going at it alone, or by hiring an attorney. We have a complete write up on how to defend yourself in court on this site.

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6 Comments so far ↓

  • Alex

    Kristy, Nelson watson does not buy the debts they are hired by the creditor and need to follow their guidelines. As unbelievable as it sounds they arent able to settle that low. most of the time they can only approve 87% as a settlement but in some cases they can go no lower than 50% and they do not have debts for to long if you do have a couple contacts with the company and arent able to come to an agreement they will send the acct back to cap1 where they would review the acct for a lawsuit….i was taken to court by cap1 after trying to settle with cap1 for 25% a judgement was placed against me and i was found responsible for the court fees as well, my wife still had an acct with them and i was able to settle for 65% due to the fact it isnt a purchased debt you need to understand they cant take whatever they wont as a payment, if the 2500 is all you have trying getting a settlement with a down payment thats what i did

  • Kristy Welsh

    @Alex – one size does not fit all and I still encourage people to settle for way less than a collection agency is trying to get. There are many creditors that will settle for a fraction of the amount. It never hurts to ask.

  • Colleen

    I contacted a law firm today in Michigan that is trying to sue me on Capital One’s behalf. It says “this is a communication from a debt collector” at the bottom of the summons. I told the attorney that I could pay $50 a month on the original amount of $2500 that I owe. This debt was charged off awhile ago, by the way. The lawyer refused and said his client wants $115 a month with a $500 deposit so that it can be paid off in 24 months and the full amount plus interest, late payments and court fees. Haven’t even gone to court yet. The attorney also asked me about my income (none, I’m laid off) and my bank account info. I wound up hanging up on the guy.

  • Angel

    Whatever you do show up to court I was in a very similar situtaion…I didn’t show up to court because I was told by someone at the clerks office..it wouldn’t matter..they judgement will be made. I didn’t show they won almost a year ago. I still tried to work with them. I just found a job (less than 12 dollars an hour)a few months ago and now they are garnishing my check for 400 for a total of almost 3000.00 dollars on an 800.00 dollar debt. (slightly under 1/3 of my check) If I had it to do again, I would show up and plead my case to the judge. GOOD LUCK

  • Shannon Elwell

    I have had a lawsuit filed against me too concerning Capital One. This law firm who you guys have mentioned are the same people who filed the lawsuit against me. I turned all the lawsuit papers over to my attorney. The people at this collection law firm absolutely would not work with me so that I could make payments to them that I could afford. In fact I did send them one payment, but I guess that was not good enough for them.

    I am retired and I receive $1700 a month which has to cover all my living expenses. I obviously cannot afford to send these Capital One people loads of money. I hope that my attorney will be able to get them to back off.

    I have been so depressed since this happened. I found out last week about the lawsuit Capital One’s lawyers were filing against me.

  • Kristy Welsh

    I recommend that you go do some reading on our legal discussion boards. Many people have successfully defended themselves after reading the information on these boards.

    http://www.creditinfocenter.com/forums/there-lawyer-house/

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