Many families put a lot of extra charges on their credit cards during the holiday season, and it may be difficult for them to pay their credit card bill when the time comes. If you fail to make your credit card payments, the credit card company may eventually sell your account to a collection agency.
The credit card company or the collections agency may exercise their creditors' rights and file a lawsuit against you in civil court for the balance on your card. This will not happen right away, as companies will often try to collect debts for over a year before they go after you in court. Generally, if the court finds in their favor, the agency or company will be allowed to collect your debt by garnishing wages and tapping into your bank account. However, they won't be able to sue you forever. Each state has its own statute of limitations that prevents agencies and credit card companies for suing for unpaid debts after a certain period of time. For example, in Texas, debt collectors can only sue for debts that are less than four years past due.
Fortunately, debtors prison is no longer an option, so you will not have to worry about going to jail over an unpaid credit card bill. However, if you do not follow court orders, you can be held in contempt of court and end up in jail.
Once you have been notified of a lawsuit, you will have to respond within 30 days, or else the court will likely grant a default judgment in the debt collectors' favor, granting their request to garnish wages or bank account. If you have been sued, you will first need to verify the debt. You can then request a settlement, pay the full amount, or work with a credit counselor to come up with a debt management plan. If you feel that none of these are a viable option, you may consider filing for bankruptcy. While bankruptcy can stay on your credit report for up to 10 years, it can save you from having to pay your debts. A bankruptcy attorney can provide you with more information to determine whether filing for bankruptcy is the best option for you.