An article out of New Jersey has identified an increase in the number of credit card related lawsuits that have been filed in an effort to recover money owed to creditors. “Lawsuits to recover debts of between $3,000 and $15,000 increased 25 percent from the fiscal year ending June 30, 2007, to the year ending June 30, 2010, according to court records,” the article says.
This falls into line with my own personal observations. There has been a noticeable increase in the number of people who are contacting me which have either been sued or threatening to be sued by their credit card companies.
Paul Hartwick, a spokesman for Chase Card Services, said that in addition to the economic climate, another factor behind the rise in lawsuits is the increase of debt-settlement companies “that often instruct individuals to stop making payments” even though the bank hasn’t agreed to the arrangement.
Chase doesn’t do business with debt-settlement companies, according to a statement from the bank. But for people facing financial hardships, the bank may restructure loans to make payments more affordable or may make arrangements with state-licensed, nonprofit credit-counseling agencies. Those agencies in turn negotiate reduced payments for customers.
The Chase statement is interesting since I am aware of some debt settlement companies that have been able to settle some debts directly with Chase.
To read the full article, click here.