Sued by a Debt Collector? Here's What to Do First

A process server hands you papers. You read "Summons" and "Complaint" and your stomach drops. You're being sued for a debt you barely remember—or never knew existed.

This happens to thousands of Americans every week. The good news: you have options. The bad news: your window to act is narrow. Most states give you 14 to 30 days to file a legal response. Miss that deadline and you lose by default.

Here's exactly what to do when a debt collector takes you to court.

Read Every Word of the Lawsuit

Start with the papers you were served. You're looking for three critical pieces of information:

• The deadline to respond. Usually printed at the top of the summons. This is your drop-dead date.
• Who's suing you. Often not the original creditor. Debt buyers purchase old accounts for pennies on the dollar.
• How much they claim you owe. Original debt plus interest, fees, and sometimes attorney costs.

The complaint should list the debt's origin, when you allegedly stopped paying, and the amount. Check if they attached any documentation,account statements, a signed credit agreement, or an assignment showing they own the debt.

Many lawsuits are thin on proof. That matters.

File an Answer Within Your State's Deadline

Your Answer is a formal court document that forces the debt collector to prove their case. Without it, the court enters a default judgment against you. Game over.

Each state sets its own deadline. In California, you have 30 days. In New York, 20 or 30 days depending on how you were served. Texas gives you until 10 a.m. The Monday after 20 days have passed. Check your summons or call the clerk's office listed on the paperwork.

What Goes in an Answer

Your Answer responds to each numbered paragraph in the complaint. You have three options for each claim:

• Admit if the statement is true and you have proof
• Deny if it's false or you have no knowledge of it
• State you lack sufficient information to admit or deny (this works like a denial)

If the complaint says "Defendant opened a credit card account with Capital One on June 15, 2019," and you have no memory of that, deny it. Make them prove it.

You can also raise affirmative defenses,legal reasons the debt collector should lose even if the debt is real. Common defenses include:

• Statute of limitations (the debt is too old to sue over)
• Lack of standing (the collector doesn't own the debt)
• Payment or settlement (you already resolved this)
• Identity theft or fraud
• Violations of the Fair Debt Collection Practices Act

Once you've drafted your Answer, file it with the court clerk and send a copy to the debt collector's attorney. Most courts require both a mailed copy and an electronic filing. Verify the exact process with the clerk.

Demand Proof the Debt Is Yours

Debt collectors win roughly 90% of lawsuits, mostly because defendants don't show up. When you do fight back, many cases collapse.

Use discovery to request documents:

• The original signed credit agreement
• Account statements showing charges and payments
• Chain of custody proving the collector owns the debt
• Verification the debt hasn't passed your state's statute of limitations

Send these requests in writing to the plaintiff's attorney after you file your Answer. Many debt buyers lack complete records. If they can't produce a signed contract or detailed statements, their case weakens.

You can also request a debt validation letter under the Fair Debt Collection Practices Act. Collectors must provide this within five days of first contacting you. It should list the debt amount, the original creditor, and your right to dispute.

Check the Statute of Limitations

Every state sets a deadline for creditors to sue over unpaid debt. For credit cards, it ranges from three years (in several states) to ten years (in Wyoming). Once that window closes, the debt becomes "time-barred."

If your debt is past the statute of limitations, raise that as a defense. The court should dismiss the case. But you need to act,judges won't research this for you.

Calculate from the date of your last payment or the date you last used the account, whichever is later. If the debt collector can't prove when that was, they may not be able to sue.

Show Up to Court

Even after filing an Answer, you need to appear for hearings. Courts schedule these weeks or months after you file, depending on the docket.

Bring three things:

1. Your filed Answer and any correspondence with the debt collector
2. Any proof the debt isn't yours or was paid
3. Notes on what you want to say

Dress like you're going to a job interview. Address the judge as "Your Honor." Stick to facts, not emotions.

The debt collector's attorney will present their case first. They'll submit account statements, affidavits, and the assignment of debt. You can object if documents lack proper authentication,"Your Honor, this statement has no signature or sworn testimony attached."

When it's your turn, explain why you dispute the debt. If you requested documents they didn't provide, tell the judge. If the statute of limitations has passed, state that clearly.

Judges see hundreds of these cases. They respect defendants who show up prepared.

Consider Settlement Before Trial

Most debt collection lawsuits settle. If the collector has solid evidence and your defenses are weak, negotiating may save you money.

Debt buyers typically pay 4 to 8 cents per dollar of debt they purchase. A $5,000 credit card balance cost them maybe $300. They'll often accept 30% to 50% of the balance to close the case.

Before you agree to anything:

• Get the settlement in writing before you pay a dime
• Confirm the amount is the final payment (no remaining balance)
• Ask if they'll agree to dismiss the lawsuit with prejudice (meaning they can't refile)
• Verify they'll report the account as settled to credit bureaus

Pay via money order or cashier's check, never from your checking account. Keep proof of payment forever.

If you can't afford a lump sum, some collectors accept payment plans. Be realistic. If you agree to $200 a month and miss payments, they'll resume the lawsuit.

What Happens If You Lose

If the court rules against you, the collector gets a judgment. This allows them to:

• Garnish up to 25% of your wages (federal limit; some states protect more)
• Freeze and withdraw funds from your bank account
• Place a lien on property you own

Judgments last 5 to 20 years depending on your state, and many can be renewed. They also wreck your credit for up to seven years from the judgment date.

You can fight garnishment if the debt collector violates exemption laws. Social Security, disability benefits, and certain retirement funds are usually protected. If those funds are in your account when it's frozen, file an exemption claim immediately.

Bankruptcy as a Last Resort

If you're facing multiple lawsuits or judgments you can't pay, bankruptcy may discharge the debt entirely. Chapter 7 wipes out unsecured debts like credit cards and medical bills. Chapter 13 sets up a 3-to-5-year repayment plan based on what you can afford.

Filing bankruptcy triggers an automatic stay, stopping all collection activity,including lawsuits and garnishments,immediately. Learn how to file for bankruptcy or use our bankruptcy screener to see if you qualify.

Bankruptcy isn't a failure. It's a legal tool designed to give people a fresh start when debt becomes unmanageable.

Know Your Rights Under Federal Law

The Fair Debt Collection Practices Act limits how collectors can treat you. They cannot:

• Call before 8 a.m. Or after 9 p.m.
• Contact you at work if you tell them your employer prohibits it
• Threaten arrest or violence
• Lie about the amount you owe or their authority
• Discuss your debt with third parties (except your attorney or spouse)

If a collector breaks these rules, document everything. You can sue them for violations and potentially recover up to $1,000 plus attorney fees.

You also have the right to request they stop contacting you. Send a written cease-and-desist letter via certified mail. They can still sue, but they must stop calling and texting.

When to Hire an Attorney

If the debt is over $5,000, the lawsuit involves multiple creditors, or you're already facing wage garnishment, consult a consumer rights attorney. Many offer free consultations.

Attorneys who specialize in debt defense know procedural tricks that can get cases dismissed. They also negotiate better settlements because collectors know they'll face a real fight.

Some attorneys work on contingency for FDCPA violations, meaning they only get paid if you win. Ask upfront about fees.

Legal aid organizations also help low-income defendants for free. Search "[your state] legal aid debt collection" to find resources.