Leaving your credit card debt unpaid will not only damage your credit, it may leave you vulnerable to a lawsuit. Unless the debt you owe to your credit card company is tens of thousands of dollars, the company is more likely to sell the debt to a collection agency than attempt to sue you to collect the outstanding balance. Collection agencies, however, have been known to use lawsuits on a regular basis to collect old debts. Ask yourself the following questions to evaluate your risk of being sued over an unpaid credit card debt.

How old is the debt?

Although some collection agencies have been known to file a lawsuit over debts that are extremely old, this is not a common practice due to its high failure rate. The debt collection statute of limitations in each state prevents creditors from using the legal system to collect debts from consumers after a given time period. The time period varies by state, so check with your state attorney general’s office to find out if the debt is too old to merit a lawsuit.

Keep in mind, however, that just because a debt is too old for a lawsuit to be legally levied, that does not mean that a lawsuit won’t occur. Should you be sued for a debt that is outside the statute of limitations, your failure to show up in court and point out that the statute of limitations on the debt in question has expired will result in the creditor winning the case. Thus, you could end up with a judgment against you for a debt that was too old to be legally enforced. Collection agencies are notorious for attempting to sue over out of statute debts. Even so, your risk of facing a lawsuit drops significantly as soon as the statute of limitations on the debt expires.

How much is the debt?

The greater the amount you owe, the greater your risk of being sued. It is rare, however, that a consumer faces a lawsuit for any debt less than $1000. If you owe a few hundred dollars on an old credit card, the odds of your creditor suing you over the debt are minimal.

Even though a creditor can include its attorney fees and filing fee in its lawsuit, there is no guarantee that you won’t fight the lawsuit and win. If a debtor is properly informed of his rights, he can present quite a challenge to a plaintiff attempting to recover old debt. Thus, most creditors are not willing to take the risk of suing a debtor unless the potential rewards are greater than the potential losses.

Keep in mind, however, that interest will continue to accrue on your debt until it is paid. Over time, interest charges and fees could result in the amount you owe climbing to a level that may make a lawsuit more likely.

How can the creditor collect?

After a successful lawsuit, the creditor will be awarded a judgment against you. What the creditor can do with the judgment, however, depends on your state laws. If your state permits creditors to garnish wages, levy bank accounts, and place property liens, a lawsuit over an old debt is more likely.

A creditor that knows it cannot collect on a judgment is unlikely to spend the time and resources suing you. Some states strictly prohibit unsecured creditors from using a judgment to initiate involuntary debt recovery. In these states, the percentage of debtors who face lawsuits over their debts is extremely low. Check your state laws to determine if your state allows involuntary debt recovery.

There is no way to determine with 100% surety whether or not your unpaid credit card debt will result in a lawsuit from either your creditor or a collection agency. You can, however, evaluate your likelihood of being sued, depending on the state you live in. Keep in mind as well that, even in states that permit involuntary recovery, a credit card company or collection agency cannot seize government assistance and retirement pay from you. Thus, if your income comes from Social Security checks or public assistance, you should notify your creditor of this fact. Doing so will often result in a pending lawsuit against you being dropped.