Profile for getting sued by CC companies

[onthebrink]

I have been reading on this forum lately that CC companies, particularly Amex and Chase, are increasing the speed and number of lawsuits that they file so I was wondering if the there are some common characteristics of the people and/or credit card debt profile that are triggering these lawsuits and how long after the first missed payment CC companies are filing suits.

Are these some of the factors they consider?

- Income
- Assets
- If you're paying some cards but not theirs
- Zip code
- Payment recency with them and other CCs
- Mortgage payment recency

A few more questions:

- How do they verify assets?
- Can they see if your home is underwater?
- Can they see that you have been collecting unemployment?
- Can they see what your balance is in your checking/savings accounts?
- How quickly are they suing (# of days/months after first missed payment)?
- Are they suing more quickly than 6 months ago? In other words, is this a new trend?
- Are their some CC companies that are more prone to sue than others?

We have reached the 90-day mark with the CC companies in terms of missed payments and I'm wondering if suits are just around the corner or if we still have a bit more time. I am particularly concerned about Chase, Amex and Wells Fargo Bank.

Would be interested to hear others experience/opinions.

Thank you

[Flamingo]

When you applied for the credit and were approved, attached to the form or sent do you are the details as to your account and what can and will occur if you do not make payments. If you did not read that when you signed, read it now because you will be surprised as to what you allowed them to do upon credit approval and if you did not make your scheduled payments (breach of contract). You allowed them to do a lot and they have your SS#. Best of luck to you.

[HHM]

You are assuming they are more sophisticated about this decision then they actually are.

There are 2 primary factors.
1. Where you live...this is more a matter whether they bother to have attorney coverage in your area. If your in or near a major metropolitan city, the odds of getting sued increase.
2. Amount of debt, the sweet spot is $800 to $3,000. From the lenders perspective, the statistical likelihood of getting any recovery when the balance is above that amount decreases dramatically.

General timeline for lawsuits seems to be 9-12 month mark. They really don't do much pre-suit investigation. If they did, far fewer people would be getting sued than actually are.

Bottom line, there is no way to predict it with any degree of certainty, but you can usually count on getting sued by one of your creditors withing 18 month of missing your first payment.

The real question, why are you waiting for the other shoe to drop, why not start taking care of this so it doesn't go that far.

[dancersmom22]

We quit paying all our credit cards last July/Aug. We retained attorney in Sept., and referred all collection calls to him. We had planned to file this June/July because of OT (potentially) pushing us in to a 13. 2 weeks ago we received a summons from GEMB for a Care Credit account -- balance right at 3K. We have all the other usual cards, and none of them have filed yet, and most have now charged off and gone to JDBs. Balances varied widely on all our cards, some very high, and some just a few hundred dollars. So, to me there doesn't seem to be a particular method creditors use for deciding to sue. We have 2 Chase accounts, and neither of them have given us any problems, but it seems that lots of folks on these boards are getting sued by Chase. (We're filing now the 1st week of May, and (thankfully) the OT won't be a problem).

[GoingDown]

I live in Phoenix, Arizona, where there are lots of attorneys to sue me, and only 1 out of 16 creditors (CrapOne) have bothered to sue me in the past 5 years. CrapOne sued me at only 90 days past due over a $300 credit card. The rest of them threatened legal action, but never did anything.

They get most of their information about whether or not to sue from your credit report and what you tell them on your credit application and over the phone.

The first thing they will do is look at your credit report. It tells them most of what they need to know before they decide to sue you or not.

It tells them if you are making any payments at all. That lets them know whether or not you have some income or money to pay them.

It tells them if you have a mortgage. That is still a big target.

It lets them know if you have a car loan, and whether or not you are current on it.

It tells them if you have recently applied for a checking account and where.

It tells them your last known employer. They can then call this employer and simply ask to speak to you to see if you are still employed there.

Then when they call you on the phone and if you talk to them, and answer their questions, they will get all sorts of information from you, and they use this information to see if you are good candidate for a lawsuit.

During the phone call if you scare easily and make arrangements to pay or even pay them a little bit of what is owed, they make a note of this, and realize that you are easily manipulated and bullied in paying. So, they know if they sue you, you will most likely give in and pay them the full amount.

I think when they get a Cease and Desist Communications letter in the mail it tells them several things-- you know your rights, you are not a pushover, and it is going to be very difficult to get anything out of you even with a judgment. And since you are fairly well educated about debt collection, they know you might also know about filing bankruptcy, and that would make their lawsuit a waste of their money and time.

[notforsale]

We are 14 months since last cc pmts! We have not recieved any notice of suit except from our 2nd mortgage, which we got caught up on! I know we should expect a suit any day now!

[keptdigging]

I discovered a suit from Amex (on the court site... still not served so they don't know I know) while worrying about a suit from Chase. Well under 120 days.

Big amount (40K). I'm a homeowner. In a major California city. House is underwater but... how can they know. Also current on my mortgage. Some posters here thought they "smellled" assets. Who knows.

The bottom line is that you need to be prepared to be sued relatively quickly. Yes most of the people here have been able to go a year without a lawsuit... but you can't count on it.

It could be as simple as Amex wants to be feared... so if you're paying some but not all you'll pay them. Nothing creates fear like a lawsuit.

What's funny is to get the letter from Wells telling me that if I don't pay they may REPORT IT TO A REPORTING AGENCY!

The best outcome for all these guys would be credit settlement... surely you can get more that way from us than Ch 7. BUT that would encourage everyone with an uncomfortable level of debt--including those who can pay--to strategically default. So they may be better off hitting us hard... even if they force us into Ch 7 and get nothing... because of the effect it'll have on those who can still pay.

I should add that I did not talk to them, fwiw.

I could spin a dozen theories. I don't think anyone here knows the truth.

[funcritter]

I stopped paying all of my credit cards in September of 2008. At that time, I bought a new car and decided that after two months, I couldn't afford it either. Made the last payment on the car in January of 2009. My main job was at the Rocky Mountain News and I knew the newspaper was going to fold in less than two months so because of this, the car was going to have to go. Car got repoed on August 2, 2009. The only payments that I continued to make were for my utilities and my mortgage. I am in great shape on the mortgage, not upside down and have some equity built up.

Never got sued by any of the CC companies and as soon as the credit union contacted me in February stating how much I owed them after auctioning off the car, I contacted my attorney. I now have the creditors meeting on June 2.

It's been about 18 months now since I quit paying all the CCs.

[ryan]

...It could be as simple as Amex wants to be feared... so if you're paying some but not all you'll pay them. Nothing creates fear like a lawsuit..

That actually makes sense. I guess a CC company at this stage wouldn't want to be known as "EASY" or fair to work with. Instead they would want to be feared. If there were rumors about them, they would want that.

[onthebrink]

keptdigging,

Somewhat similar profile to yours. I am also in a major CA city but unlike you have fallen behind on mortgage and trying to negotiate a loan mod with Chase. BTW, I got the same letter from WFB. I have retained an attorney to negotiate debt settlement. We have 12 CC accounts; three of which are with Amex. We are 3 months late as of last week on two of them and will be 3 months late on the third first week in May. Received letters on Friday canceling two of the accounts (one that is three months late and another that is about to be).

The letters do not threaten legal action but do state that the cancellation may result in negative reporting to consumer reporting agencies. Also, state if don't pay accounts in a timely manner, my be referred to a collection agency.

Did you get your accounts canceled and receive similar notifications just prior to the suit? Did they provide any forewarning about potential legal action?

Thanks