How to Get a Debt Lawsuit Dismissed in 5 Steps

Dealing with debt collectors creates stress and exhaustion.

Millions of Americans face this anxiety every day. Beyond persistent phone calls, many collectors file lawsuits to recover money.

If you’ve been sued for a debt, don’t panic. You still have time and options to resolve the lawsuit. Many debt lawsuits get dismissed or settled outside of court.

This guide explains how to get a debt lawsuit dismissed. Whether you question the debt’s validity or want fair settlement terms, you can move forward confidently.

Follow These 5 Steps to Get Your Debt Lawsuit Dismissed

Debt collectors can be intimidating. Finding a lawyer can be equally stressful and expensive.

You can represent yourself in court and settle your lawsuit. Here are five ways to win your debt collection lawsuit:

1. Respond to the lawsuit
2. Ask the debt collector to prove their case
3. Use the statute of limitations as a defense
4. Negotiate to settle the debt for less
5. File a settlement agreement to get the case dismissed

The most reliable path to dismissal is reaching a settlement agreement. When both sides agree on a reduced payoff amount in writing, the collector typically files the agreement with the court. The case gets dismissed. Settling avoids litigation uncertainty and saves time and legal costs. You can close the case permanently and move forward.

Step 1: Respond to the Lawsuit

You must respond quickly to a Summons and Complaint. Ignoring it is a critical mistake.

Whether you owe the debt or not, respond to the allegations. Your response is called an Answer.

Filing your Answer in time is crucial. If you fail to respond, the debt collector will request a default judgment. The court can then grant them the right to garnish your wages. They can take money from your checking account. They may even recover attorney’s fees and court costs.

Responding gives you an edge in the case. Many debt collection companies bet on people failing to file an Answer. When you respond, collectors are often surprised. They may offer a negotiated settlement to avoid litigation costs. They might dismiss the case altogether.

You have up to 35 days to respond, depending on your state. Filing an Answer forces the debt collector to prove their case. Our partner Solo can help you draft and file your Answer properly.

What Does a Debt Collector Have to Prove in Court?

When a debt collector sues you, the burden of proof falls on them. You don’t have to prove your side initially.

A debt collector must prove you’re the person who owes the debt. They must show the debt amount is accurate, including interest and fees. They must prove you owe the debt to them, not someone else.

Proving ownership is tricky for debt collectors. Many purchase old debts from credit card companies for a fraction of the original amount. They try to collect the full balance. When debt transfers to collection, collectors often don’t receive necessary documentation. Without evidence, they have no case.

When you deny all allegations in the Complaint, the collector must prove each one. If they can’t prove their claims with real evidence, they might dismiss the case voluntarily.

Step 2: Ask the Debt Collector to Prove Their Case

You have the right to raise affirmative defenses in your Answer. These defenses challenge the collector’s claims.

An affirmative defense is any legal reason the collector’s case is invalid. You can challenge their right to even file a lawsuit. If a collector attempts to recover on a delinquent credit card, they must prove they possess the legal right to collect. They need evidence like a transfer of the signed credit card agreement.

If the debt collector can’t produce this evidence, you can request dismissal. The collector lacks the “chain of custody” evidence required to take you to court.

You have many affirmative defenses available. According to US Federal Rules of Civil Procedure, Rule 8(c), you can assert defenses including:

• Accord and satisfaction
• Arbitration and award
• Duress
• Fraud
• Payment
• Statute of limitations
• Waiver

These defenses strengthen your case and force the collector to do more work. Our partner Solo helps you make the right affirmative defense the right way.

Step 3: Use the Statute of Limitations as a Defense

In most states, creditors have a limited time to collect debt through lawsuits. After this period expires, the statute of limitations passes. The debt collector loses their right to sue.

If a collector sued you on a debt where the statute of limitations expired, use this as an affirmative defense. You can likely get the case dismissed.

The statute of limitations varies by state and debt type. The clock starts ticking from the day of your last payment. Before agreeing to make any payments, check the statute of limitations on your debt. Otherwise, you risk restarting the clock.

Check your state’s statute of limitations carefully. You may have a solid defense that ends the lawsuit immediately.

Step 4: Negotiate to Settle the Debt for Less

Even if the collector has a valid case, most lawsuits end in negotiated settlements. Often for less than the full balance.

Collectors prefer resolving accounts quickly over spending time and money in court. You benefit by closing the case and avoiding a judgment. A fair settlement puts you in the best position to request a dismissal.

Settlements benefit both sides:

• You may resolve the balance for less than the full amount owed
• The collector can close the account without extended litigation

Once you’ve responded to the lawsuit, you can begin negotiating. Contact the debt collector or the law firm representing them directly. Most firms handle settlements through a dedicated collections agent or paralegal. Call the number on the summons or recent correspondence.

Use simple, neutral language. Avoid admitting liability. Your goal is to open a conversation, not confirm you owe the debt.

How to Negotiate Safely and Effectively

• Start the conversation early. After responding to the lawsuit, reach out to show you’re interested in resolving the debt. Early outreach signals good faith and can lead to better offers.
• Express interest in resolving the case. Use neutral language like: “I’m looking to explore possible settlement options.” Avoid saying “I owe this debt” or “I can’t pay.”
• Ask what settlement programs they offer before naming your number. Try: “Can you tell me what options you’re authorized to offer?” This puts the burden on them.
• Ask for a realistic reduction. Many collectors settle for 40-60% of the balance. The amount depends on the debt’s age and their documentation. Start by asking what they can offer, then counter with an amount you can afford.
• Offer a lump sum or short payment plan. Lump-sum payments usually yield the biggest discounts. Short-term plans of 3-6 months can work too. Clearer, quicker proposals are easier for collectors to approve.
• Focus on what you can afford. Say: “Based on my current finances, I can offer $___ as a lump-sum payment.” Or: “I can commit to a __-month plan at $___ per month.”
• Get everything in writing. Before paying anything, request a written agreement. It should outline the settlement amount, payment schedule, and confirmation the lawsuit will be dismissed.
• Use a secure platform to keep negotiations organized. Tools allow both sides to exchange offers online, avoid stressful phone calls, and create a clear paper trail.

Many debt collection agencies are professional debt buyers. They purchase charged-off debt accounts from creditors at a fraction of the original amount.

On average, debt collectors buy old debts for 4% of the debt amount. When they collect the debt in full, they make a huge profit.

Since most collectors purchase debts for such a small fraction, they’re willing to settle for less. Settling is better than getting too deep into a legal battle.

You can settle your debt for good. File your Answer to the lawsuit first. Then negotiate with the lawyers and settle for less. Start with a small offer so you give yourself room to build. Expect several rounds of counteroffers before reaching an actual settlement.

Even if you only pay around half the debt amount, the collector will probably still make a profit. Settlement can be a win-win situation.

Step 5: File a Settlement Agreement to Get the Case Dismissed

Once you’ve reached a settlement and made your payment, file a written agreement. This is often called a stipulated dismissal, stipulated judgment, or settlement stipulation.

Filing ensures:

• The court knows the case has been resolved
• The lawsuit is formally dismissed
• You avoid further legal action on the same debt

Getting the agreement in writing makes your deal official. Before paying anything, receive the written agreement from the debt collector or their attorney. Sign it. The agreement should clearly outline all terms to prevent confusion later.

What a Safe Settlement Agreement Should Include

• The total settlement amount. The exact dollar figure you’ve agreed to pay, whether lump sum or reduced balance.
• A clear payment schedule. If making installments, the agreement should list due dates, amounts, and submission methods.
• The deadline for making all payments. Many agreements include a final deadline. Missing it could void the deal.
• An explanation of what happens once you pay in full. The agreement should state that completing payment satisfies the account. No additional balance will be pursued.
• Confirmation that the lawsuit will be dismissed. The agreement should specify whether the collector will file a dismissal with prejudice or without prejudice. This protects you by ensuring the case closes.
• Where to send payments and who to contact. The agreement should list the correct entity, address, or payment portal. Include a contact person or department for questions.
• Any consequences of missed or late payments. Understand what happens if you accidentally miss a payment.
• How communication will be handled. Some agreements specify whether updates come by email, mail, or phone.

Our partner Solo helps you negotiate online, document your agreement, and settle your debt lawsuit permanently.

What Is Solo?

Solo makes it easy to resolve debt with collectors.

You can use Solo to respond to a debt lawsuit. You can send letters to collectors. You can even settle a debt. Solo’s Answer service is a step-by-step web app. It asks all necessary questions to complete your Answer. Upon completion, an attorney reviews your document. Solo files it for you.

Solo can help you contact your debt collector or creditor. You can negotiate the debt to settle for less, all online. It simplifies and streamlines the process to settling your debt.

No matter where you find yourself in the debt collection process, Solo helps you resolve your debt.