Help! I’m Being Sued by My Debt Collector

A few months behind on your credit card payments? Ignoring loan obligations? Your creditor might assign or sell your debt to a third-party collection agency.

The debt collector will then attempt to collect what you owe. Continue ignoring their requests, and you might get sued.

Receiving a summons for a debt lawsuit can feel overwhelming. You might wonder what to do next. The most important thing? Respond to the lawsuit.

Follow the guidelines below to make the right move. You might even negotiate a settlement where you pay less than you owe.

What Happens When You’re Sued by a Debt Collector?

Understanding the timeline helps you prepare for what’s ahead. Here’s what typically happens:

1. Initial contact: You receive a phone call or letter from the debt collector. Expect this when your debt is at least 180 days past due.
2. Validation letter: The collector must send this within five days of contacting you. It includes how much you owe, the creditor’s name, and how to dispute the debt.
3. Disputing the debt: Think the debt isn’t yours? Request a verification letter within 30 days of the validation notice.
4. Legitimate debt: Know you owe the money? Respond to the collector immediately. Create a plan to pay, set up payments, or negotiate.
5. Lawsuit filed: Fail to pay or settle? The collector sues you. You’ll receive a court notice with an appearance date.
6. Default judgment: Don’t show up in court? The judge rules in favor of the collector automatically.
7. Consequences: Default judgments lead to wage garnishment, property liens, or frozen bank accounts.

Ignoring the problem only makes things worse. Take action now to protect yourself.

Here’s What to Do When You’re Sued by a Debt Collector

1. Respond to the Lawsuit

Verified the debt is legitimate? You must respond to the lawsuit.

Ignoring it seems easier. It’s actually the worst option available. The collector won’t drop the lawsuit just because you don’t respond.

Missing deadlines makes fighting your debt much harder later. Respond promptly and protect your rights.

2. Challenge the Debt Collector

Debt collectors are typically third-party agencies. Your debt has changed hands at least once, possibly more.

You should challenge the lawsuit if:

• You believe they’re suing the wrong person
• You already paid off the debt
• The debt amount is incorrect
• The statute of limitations has passed

The statute of limitations determines how long a collector can legally pursue you. It ranges from three to 20 years depending on your state and debt type.

Past the statute of limitations? The debt becomes unenforceable in court.

3. Get Validation of the Debt

Disagree with information in the lawsuit? File a response requesting debt validation.

The collector must prove several things. They need to show where the debt originated, how much you actually owe, and that you’re the debtor.

Can’t provide proof? They can’t win their case against you.

Our partner Solo can help you respond effectively and request proper validation.

4. Bring Evidence of FDCPA Violations

Has the debt collector violated your rights? Bring evidence to your trial.

The Fair Debt Collection Practices Act (FDCPA) protects you as a consumer. The Fair Credit Reporting Act and Truth in Lending Act provide additional protections.

Under the FDCPA, debt collectors cannot:

• Contact you outside 8 am to 9 pm
• Harass you with profanity or threats of harm
• Threaten to take property they have no legal right to seize
• Contact you after you’ve hired a lawyer
• Lie about their identity or the amount you owe
• Engage in unfair practices like depositing post-dated checks early

Document every violation. These can strengthen your case significantly.

5. Decide If You Want to Accept the Judgment

You have several options for proceeding with a debt collection lawsuit.

Accept the judgment but want to avoid court? Negotiate a settlement outside of court.

Have limited wages and assets? You might be judgment proof. Your wages can’t be garnished in this situation.

Debt so overwhelming you can’t manage it? Filing for bankruptcy might be your best option.

6. Negotiate to Settle Your Debt

Is your debt legitimate? You might get the lawsuit dropped by negotiating a settlement.

You can afford to pay some of the debt? Settlement lets you avoid court altogether.

Before starting negotiations, calculate what you can actually afford. Consider your living expenses carefully. Debt collectors prefer lump sum payments.

Start by offering 30% to 50% of the original debt amount. Prepare to negotiate upward if they reject your initial offer.

Negotiations going well? Get everything in writing. Create a debt settlement agreement that states your payment settles the debt in full.

The agreement should confirm they won’t pursue further legal action or collections.

Our partner Solo provides smart tools to help with settlement negotiations. You can begin the process online when sued for a debt.

Don’t Let a Default Judgment Ruin Your Finances

Being sued by a debt collector doesn’t mean you’ve lost. You have rights and options available.

Respond to the lawsuit quickly. Challenge inaccurate information. Request debt validation when necessary.

Document FDCPA violations. Negotiate settlements when the debt is legitimate. Consider all your options before accepting a judgment.

Taking action now protects your wages, bank accounts, and property. You can resolve this debt issue and move forward.