Understanding what you need to do in order to set aside your credit card default is especially important if you feel the default judgment is in error. In some cases, a default is claimed by a credit lender even after the consumer believes the problem was solved.
Reasons for Credit Card Default
The entire financial industry has been changed with the enormous increase in the second financial markets. With debt papers being sold and resold in various investment packages, consumer may not know what company they owe money to.
If you have credit card debts that were discharged through filing personal bankruptcy, it is possible the debts were not properly recorded as discharged. If that happens, the company owning the credit card debt may file default notice against you.
When you learn how to set aside credit card default judgments, you can protect yourself from such court actions and the collection efforts that result.
Another potential problem in the area of credit card default is when a consumer contacts his lender about his debt and requests proof of ownership of the debt or details of the alleged non-payment.
If the debt was sold to another company, the consumer may be contacting the wrong lender while the new owner of the debt is pursuing collection.
The How To
To set aside credit card defaults you must file the proper forms with the court. You will be asked to provide proof of your allegations if you claim your requests for information to the lender were ignored or that your debt should have been dissolved under a bankruptcy court.
State laws vary but usually require the filing of a notice of motion to set aside fault judgment and will include another form that will provide supporting affidavits and declarations. Credit default judgments are regulated by both federal credit lending laws and state laws.
Your success in setting aside credit card default judgment does not rely only on proving you don’t owe the original debt. Often, mistakes made by the lender in the debt collection process can result in a consumer winning in court. If the court refuses the lender’s claim, you may be off the hook for that debt repayment.
Details are Important
If you are struggling to pay your debt, keep a copy of any communications between you and the lender. Keep a record of any phone calls to include the name of the person you talked to, the time and date of the call and the resolution, if any, offered by the lender.
It is worth the time you spend to verify every action taken by the lender to collect this credit card debt from you and to itemize each of your actions and responses to those efforts by the lender or collection agency.
When you receive notice of a court action being filed against you to collect credit card debt, do not ignore the notice. Failure to answer the court filing will result in the lender’s request being automatically granted by the court.
If you ask how to set aside your default, you may find you have more ammunition to fight the lender’s claim than you expected. In some cases, the notice of filing of a default action is delivered to the wrong person or the wrong address.
Effect on Your Credit Rating
Defaulting on credit card debt will damage your credit rating. There is no way around that even if you win in court!
Any time you are unable to pay the debt you owe on credit cards, your credit file will be damaged. This can be overcome but it will take time and a significant number of timely payments on accounts to balance the black mark in your file.
Recommended Reading
- How hard is it to consolidate your credit cards and can you do it by yourself?
- The pros and cons of debt management services and how to avoid the fishy ones.
- What can you do in order to avoid excessive debt and becoming another victim?
Summary
If you know how to set aside default judgments you can prevent garnishment of wages or other collection activities.
Understanding the process, using the proper forms and adhering to state and federal laws will help you succeed.
