That is a very common question I am asked by our clients. Why me? Why am I being sued? To help answer this question I usually refer to two things.
Firstly, I approach it from a legal standpoint. The explanation is actually quite simple in reality. There is a contractual agreement between the cardholder and the bank. if the cardholder does not remit, at the very least, the monthly minimum payment the agreement is being breached. Once you breach the agreement the other party has the right to commence litigation to recoup their losses/damages (in this case, the amount owed to them). This is no different to a dispute between two parties arguing over a kitchen renovation. If the contractor provided the services and the homeowner did not pay for those services, for whichever reason, then there is a breach of the agreement between the parties and the contractor could bring lawsuit to mitigate their losses.
The second approach is a more logical approach. In most cases, it is not the bank who commences the litigation. The bank will retain the services of a law firm or a collection agency (who must then have a licensee) to commence the litigation. The law firm or collection agency will consider factors such as; reported income on your credit application, age, home ownership, credit score, balance owed, account history etc as reasons to commence litigation. The more things working against that consumer, the more likely litigation would commence. The fewer things working against the consumer, the less likely litigation would commence.
Thankfully, most creditors are willing to listen to your reasons for not being able to pay them. As long as you have a reasonable explanation as to why you were unable to pay and as long as you have a lack of assets/money to pay them with, they will work with you to come to an agreement. Having said that, there are also laws in place to help protect the Canadian consumer from credit providers and it is always a good idea to know what your rights are.
For more information regarding your legal rights when it comes to bank debt, feel free to reach out to me at acooper@totaldebtfreedom.ca or call me at 416 855 0485. I am a licensed paralegal and have approximately 10 years experience negotiating settlements on credit card debt.