What to Do If You’re Sued for a Debt

If you’ve been served with court papers about a debt, take a breath, and then act. You have rights in this process, and many people who respond do better than those who don’t. The single most important thing: find the deadline in the papers and respond before it passes.

Step 1: Read the papers and find the deadline

Court papers usually include a summons and a complaint. The summons tells you which court the case is in and how long you have to respond. The complaint says who is suing you and why. Write the deadline somewhere you’ll see it.

Check that the papers are real. Look up the court’s phone number yourself, not the number on the papers, and call to confirm the case exists. Scammers sometimes send fake lawsuit threats.

Step 2: Respond by the deadline

According to the CFPB, you should respond to the lawsuit, yourself or through a lawyer, by the date in the court papers. Responding doesn’t mean you agree that you owe the debt. When you respond, the collector has to prove to the court that the debt is valid.

How you respond depends on your court. Often, it means filing a written answer with the court clerk and sending a copy to the other side. Many courts have self-help centers and forms.

What happens if you don’t respond

The CFPB explains that if you don’t respond, the court may enter a default judgment against you, for the amount claimed plus allowed costs, interest and attorney fees. With a judgment, the creditor may be able to garnish your wages or bank account, or place a lien on property, depending on your state’s laws. The FTC warns that ignoring a lawsuit can cost you the chance to fight a court order.

Possible defenses

You may have defenses even if you did have the debt. Common ones include:

• The debt is too old. If the statute of limitations has passed, you usually must raise this yourself. See time-barred debt.
• It’s not your debt, or it’s a case of mistaken identity or identity theft.
• The amount is wrong, including fees or interest you didn’t agree to.
• The plaintiff can’t prove it owns the debt, which can come up when debts have been sold.
• You already paid or settled it.

An attorney or legal aid office can tell you which defenses apply in your state.

Get help, often for free

• Legal aid offices and law school clinics may help for free if you qualify. The CFPB has tips on finding a lawyer.
• Consumer attorneys who handle debt collection cases. Some take cases where the collector broke the law at little or no cost to you.
• Your court’s self-help center for forms and filing instructions.

Can you still settle?

Yes. The CFPB notes that if you owe the debt, you may be able to negotiate a settlement or payment plan with the collector, even after a lawsuit is filed. If you do:

• Get the agreement in writing before you pay.
• Make sure it says the case will be dismissed, and how.
• Keep proof of every payment.
• Remember that forgiven debt may be taxable.

Still respond to the lawsuit while you negotiate, unless the case is formally dismissed.

Go to every court date

Show up, on time, with copies of your papers and any proof: payment records, letters, your validation notice. If you can’t attend, contact the court before the date.

If there’s already a judgment

You may still have options, like asking the court to set aside a default judgment in some situations, or claiming exemptions that protect part of your income or property from garnishment. Read wage garnishment: what it is and how to respond, and talk to legal aid quickly.

The bottom line

A debt lawsuit is serious, but it isn’t the end of the road. Respond by the deadline, ask for proof, raise any defenses, and get free legal help if you can. For your rights before a case is filed, see your rights when a debt collector calls and how to ask a debt collector to prove a debt.

Sources: CFPB: what to do if you’re sued by a debt collector or creditor · CFPB: finding a lawyer · FTC: debt collection FAQs · CFPB: time-barred debt