Credit card companies and collection agencies are quite within their rights to take legal action against you if you have failed to pay a debt that you legitimately owe. Taking out credit is a legal agreement, so if you fail to keep up with your end of the bargain by not paying the money back when it is due, you can be sued.
This does not mean that it is a foregone conclusion that you will be sued, as it can depend on many other factors. Taking someone to court will obviously cost the card company money, so they will want to weigh up the cost in legal fees and staff time, compared to what they are realistically likely to get back at the end of the process.
The fact that you are sued does not magically bring money out of the air for the card company, so if you genuinely cannot afford to pay back what you owe, being sued will not change that. If they successfully sue you, you will be ordered to pay back the money at a rate which the court decides you can afford, after looking at your finances.
You do not want a court judgement against you if you can help it, of course, so it is much better to deal with the problem before it gets to the stage of going to court. By far the best way to deal with credit card debt is to agree a settlement with the company. This may sound easier said than done, because it is, but it is perfectly possible to agree settlements for much less that you owe, if you understand how the card companies work.
My usual advice to anyone in debt would be to never ignore the issue and to talk to your creditors and try to establish a relationship. However, credit card debt is quite a distinct area of debt and requires some specialist advice. For instance, at certain times, it may actually help to ignore approaches from the card company, because timing, in settlement terms, is everything. Judging when to negotiate and when not to, can make the difference between not achieving a settlement and wiping out most of your debt.
The main choice you have to make if you are in serious debt to credit card companies is whether to try to reach settlements with your creditors by undertaking negotiations with them yourself, or whether to use a professional company to do this on your behalf. If you wish to do it yourself, it is difficult if you do not have any experience or understanding of how card companies operate, but is still perfectly possible if you get the right help and advice.
A debt settlement company will know what to do and the good ones are likely to get reductions on your debts of up to 60%, but you will need to pay them a proportion of what they save you as their fees. The advantage of doing it yourself is that you maximise the reductions you achieve by not having to pay a settlement company.
Read a detailed guide on how to negotiate debt.
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