Legal Question in Credit and Debt Law in Florida
If a Credit Card has not been paid for 5 months, I understand something happens at the 6 month point.
So, can some small % payment of the balance owed restart the 6 month period or does the payment have no affect on what happend at the initial 6 month point.
Also is there a dollar amount threshold where the Card Companies decide to sue or are most of the suits by the Collection Companies that buy the loans?
I don't want to be deposed at least not for another 6 months.
1 Answer from Attorneys
The magic six months. Many credit card companies have chosen the six month delinquency mark as the point at which that collectability has become so uncertain that they can no longer claim the account as an asset. This is called "charging off." But, don't get confused about this, a charge off does nasty things to your credit bureau report/credit score, it makes the bank worth that much less, and it usually marks the beginning of the account's life with a collection agency or collection attorney, but it DOES NOT decrease the amount that you owe.
Credit card companies sue debtors all the time. When I used to work collections, I represented Capital One, Circuit City, and GE very frequently. Each company decides whether they want to have a litigation cut off for low balances, so there is no way to know. I have sued debtors for as little as $400.
Charge offs are really tricky though, so if you want to learn some more about them and how they work, check out the Online Law Library on www.LaBellaLaw.com under Credit Reports and Scores. The page is titled Understanding Charge Offs.
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