Sued by a Debt Collector

If you have been sued by a debt collector, the most important thing to know is that you should not ignore the lawsuit. A debt collection case is a civil lawsuit, and the creditor or debt buyer is asking a court to enter a judgment against you.

Being sued does not automatically mean the debt collector will win. The plaintiff generally still has to establish its right to recover, and you may have defenses or other options available. What you should do next depends on the documents you received, the court handling the case, the applicable law in your state, and your individual circumstances.

Here are some steps you can take after you are sued by a debt collector.

Confirm That You Were Actually Sued

Find Your Deadline to Respond

Do Not Ignore the Lawsuit After Being Sued by a Debt Collector

Check Whether You Have Defenses After Being Sued by a Debt Collector

File an Answer After You Are Sued by a Debt Collector

Decide Whether to Fight the Case or Settle

Respond to Motions and Discovery After Being Sued by a Debt Collector

Prepare for the Hearing or Trial

Understand the Possible Outcomes After Being Sued by Debt Collector

What Happens If a Debt Collector Gets a Judgment?

Find Out What Creditors Can Actually Take

1. Confirm That You Were Actually Sued

The first step is to determine whether you are dealing with an actual lawsuit.

A real debt collection lawsuit will normally identify a court, a case number, the person or company suing you, and the amount being claimed. Depending on the state, the documents may be called a summons, citation, complaint, petition, or something similar.

Look at the paperwork and identify:

The name of the court.
The case number.
The name of the plaintiff.
The amount the plaintiff claims you owe.
The name of the plaintiff’s attorney, if one is listed.
Any deadline or hearing date shown on the paperwork.

If possible, search the court’s online docket using your name or case number. This can help confirm that the lawsuit has actually been filed and show you what has happened in the case so far.

Also look carefully at who is suing you. It may be the company you originally borrowed money from, or it may be a debt buyer that purchased the account.

2. Find Your Deadline to Respond

Once you confirm that the lawsuit is real, determine when you have to respond.

Do not assume that you automatically have 30 days. The deadline for answering a debt collection lawsuit depends on the state, the court, the type of case, and sometimes the manner in which you were served.

Your summons or citation may tell you when your Answer is due.

Write the deadline down immediately. Consider putting reminders on your phone or calendar several days before the deadline.

If the deadline is unclear, contact the court clerk or review the court’s official rules. Court clerks generally cannot give you legal advice, but they may be able to tell you where to find filing requirements, forms, or procedural information.

3. Do Not Ignore the Lawsuit After Being Sued by a Debt Collector

One of the worst things you can do after you are sued by a debt collector is simply throw the paperwork away.

If you do not respond, the plaintiff may ask the court for a default judgment.

A judgment is much more powerful than an unpaid bill. Before judgment, a debt collector generally has a claim that you owe money. After judgment, the creditor may have access to additional court procedures for attempting to collect from you.

Exactly what a creditor can do after judgment depends heavily on your state’s laws and on the type of property and income you have.

Filing an Answer can prevent the plaintiff from winning simply because you failed to participate and ordinarily requires the case to proceed through the court process.

4. Check Whether You Have Defenses After Being Sued by a Debt Collector

Being sued does not necessarily mean everything alleged in the lawsuit is correct.

Review the allegations carefully.

Possible issues may include:

The debt does not belong to you.
The plaintiff sued the wrong person.
The amount claimed is incorrect.
You already paid or settled the account.
Payments or credits were not properly applied.
The lawsuit was filed outside the applicable statute of limitations.
The plaintiff cannot establish that it owns the account.
Important account records are missing.
The plaintiff cannot adequately establish how the claimed balance was calculated.
Some charges were unauthorized or resulted from identity theft.

Debt-buyer cases can raise additional questions because the company suing you may not be the company with which you originally opened the account.

For example, the plaintiff may need to establish that the particular account being sued upon was transferred to it.

Whether any particular argument is legally valid depends on the facts of the case and the law in your jurisdiction.

5. File an Answer After You Are Sued by a Debt Collector

An Answer is your formal response to the lawsuit.

The Answer generally tells the court which allegations you admit, which you deny, and which you do not have enough information to admit or deny. It may also include affirmative defenses or other legal arguments.

When preparing an Answer:

Read every allegation in the complaint or petition.
Respond to each allegation as required by your court’s rules.
Include defenses that apply to your situation.
File the Answer with the correct court.
File it before the applicable deadline.
Provide a copy to the plaintiff or plaintiff’s attorney.
Keep a copy of everything you file.
Keep proof showing when and how it was filed or served.

Do not assume that calling the debt collector or negotiating a settlement automatically extends your Answer deadline. Unless the court or applicable rules say otherwise, treat the filing deadline as continuing to apply.

6. Decide Whether to Fight the Case or Settle

After responding to the lawsuit, you can evaluate whether you want to defend the case, attempt to settle it, or pursue both approaches at the same time where appropriate.

Fighting the lawsuit

You may decide to defend the case if you dispute the debt, dispute the amount, believe the plaintiff lacks sufficient evidence, or have another legal defense.

Remember that defending a lawsuit does not necessarily mean claiming that you never had an account. A lawsuit can involve separate questions, including:

Who owns the debt?
What amount is actually owed?
What terms governed the account?
Were all payments and credits properly accounted for?
Does the plaintiff have admissible evidence supporting its claim?

Settling the lawsuit

You may also decide that settlement makes financial sense.

If you negotiate, consider discussing:

The total amount you will pay.
Whether payment will be made in one lump sum or installments.
The payment dates.
Whether interest will continue.
Whether the lawsuit will be dismissed.
What happens if a payment is late.

Get the final agreement in writing.

Do not rely solely on a telephone conversation stating that the case has been settled.

Keep the settlement agreement and proof of every payment you make.

7. Respond to Motions and Discovery After Being Sued by a Debt Collector

Filing an Answer usually is not the end of the lawsuit.

The plaintiff may later send you discovery requests or file motions with the court.

Discovery may include:

Requests for admissions.
Interrogatories.
Requests for production of documents.
Other written requests permitted under your court’s rules.

Do not ignore these documents simply because you already filed an Answer.

Some requests can have serious consequences if they are not answered on time. For example, under some procedural rules, unanswered requests for admissions may potentially be treated as admitted.

The debt collector may also file a motion for summary judgment, asking the judge to rule without a trial because the plaintiff contends that there is no genuine factual dispute requiring one.

If that happens, simply having filed an Answer may not be enough. You may need to file a separate response to the motion by the applicable deadline and identify the evidence or legal issues that you contend prevent judgment.

8. Prepare for the Hearing or Trial

If the lawsuit is not dismissed or settled, it may eventually proceed to a hearing or trial.

Prepare your documents before the hearing.

Useful records may include:

Account statements.
Payment records.
Bank records showing payments.
Settlement communications.
Letters or emails from the creditor.
Dispute letters.
Identity-theft documents, if applicable.
Copies of everything filed with the court.

Know exactly what you dispute.

If you believe the balance is wrong, identify why.

If you believe the plaintiff does not own the account, identify what is missing from its evidence.

If you believe the debt was paid, bring proof of payment.

The plaintiff has the burden of proving the elements necessary for its claim under the applicable law. Your job is not necessarily to prove the plaintiff’s case for it.

9. Understand the Possible Outcomes After Being Sued by a Debt Collector

A debt collection lawsuit can end in several different ways.

You win

The court may enter judgment in your favor, or the plaintiff may dismiss the case.

The precise effect of a dismissal can depend on whether it is with or without prejudice and on other circumstances.

You settle

If the case settles, make sure the lawsuit is resolved according to the written agreement.

Do not assume that making the settlement payment automatically closes the court case. Check the docket afterward to make sure the appropriate dismissal, agreed judgment, or other filing has been entered.

The creditor wins

If the plaintiff proves its case, the court may enter a judgment against you.

Depending on applicable law and the lawsuit, the judgment may include the unpaid balance, court costs, interest, and other amounts the court is legally permitted to award.

That leads to the next important question: What can the creditor actually do with that judgment?

10. What Happens If a Debt Collector Gets a Judgment?

If you were sued by a debt collector and the creditor ultimately obtains a judgment, the case can move from determining whether money is owed to determining whether and how the judgment can be collected.

A judgment does not automatically mean that the creditor can take everything you own.

State and federal laws protect certain types of property and income from creditors. The amount and type of protection can vary dramatically from one state to another.

Depending on applicable law, a judgment creditor may attempt methods such as:

Garnishing a bank account.
Garnishing wages where permitted.
Placing a lien on certain property.
Using post-judgment discovery to obtain information about your assets.
Pursuing other court-authorized collection procedures.

But creditors generally cannot simply take property that the law designates as exempt.

This distinction can be extremely important when deciding whether to settle a judgment and how much leverage each side actually has.

11. Find Out What Creditors Can Actually Take

Getting a judgment and collecting a judgment are two different things.

Some people have significant property that a creditor may be able to reach. Others primarily own property or receive income that is protected by exemption laws.

A person whose income and assets are largely protected from judgment creditors is sometimes described as judgment proof.

That does not usually mean that the debt or judgment disappears. It generally means that, under the person’s present financial circumstances, the creditor may have little or no nonexempt income or property available to collect.

What Can Unsecured Creditors Take?

Use our assessment tool to better understand what could happen to your income or property if a debt collector obtains a judgment against you.

Question 1 of 5

Want a State-Specific Assessment?

The protections described above can vary significantly by state. A state-specific assessment can give you a more precise look at the exemptions that may apply to your home, vehicle, wages, bank accounts, and other property.

The Bottom Line

If you have been sued by a debt collector, do not panic, but do not ignore the lawsuit.

Start by confirming the case, identifying your deadline, and filing an appropriate response. Then review your defenses, consider whether fighting or settling makes sense, and continue paying attention to motions, discovery, and court dates.

Most importantly, understand the difference between owing a debt, having a judgment entered against you, and having property that a creditor can legally take.