Credit card lawsuits are one of the most common legal actions faced by consumers in financial distress. These lawsuits often come from original creditors or debt buyers after months or years of nonpayment. Bankruptcy is one of the most effective tools to stop these cases and eliminate the underlying debt.

 

How Credit Card Lawsuits Begin

 

Most credit card lawsuits follow a predictable path:

 

• Missed payments and default 

• Charge-off by the original creditor 

• Sale or assignment to a debt buyer 

• Filing of a collection lawsuit in municipal or common pleas court

 

Many lawsuits are filed in bulk, with minimal documentation attached.

 

The Risk of Ignoring a Lawsuit

 

Failing to respond to a credit card lawsuit can result in a default judgment. Once a judgment is entered, creditors may pursue:

 

• Wage garnishment 

• Bank account attachment 

• Judgment liens against real property 

• Ongoing interest and court costs

 

Judgments significantly reduce leverage and can persist for many years under Ohio law.

 

Bankruptcy Immediately Stops Lawsuits

 

Filing bankruptcy triggers the automatic stay, which immediately halts:

 

• Pending credit card lawsuits 

• Wage garnishments 

• Bank levies 

• Collection calls and letters

 

If a lawsuit is already pending, it is frozen. If a judgment exists, enforcement actions must stop.

 

Discharging Credit Card Debt

 

In most cases, credit card debt is fully dischargeable in Chapter 7. In Chapter 13, credit card creditors are treated as unsecured creditors and are often paid only a small percentage of the balance, with the remainder discharged at plan completion.

 

Fraud Allegations and Credit Cards

 

Creditors may object to discharge if they allege fraud, such as:

 

• Large charges shortly before filing 

• Cash advances taken with no intent to repay 

• Luxury purchases within statutory lookback periods

 

These cases are fact-specific and often defensible, but they must be addressed proactively.

 

Bankruptcy vs. Defending the Lawsuit

 

Defending a credit card lawsuit can sometimes delay or defeat a claim, but it does not resolve the underlying financial problem if multiple debts exist. Bankruptcy provides a comprehensive solution, eliminating all qualifying unsecured debt at once.

 

When Bankruptcy Is the Better Option

 

Bankruptcy is often the preferred approach when:

 

• Multiple lawsuits or collection threats exist 

• Income is being garnished 

• The total unsecured debt load is unmanageable 

• Long-term financial relief is the goal

 

A consultation can determine whether filing immediately or timing the filing around a lawsuit produces the best outcome.