How to Resolve Your Debt Lawsuit: Expert Q&A and Solutions

You face a debt lawsuit and need answers fast. We can help.

George Simons, founder of our partner Solo, addresses real questions from consumers facing debt collection lawsuits. You’ll discover practical strategies to respond, settle, or dismiss your case.

Note: George is not a lawyer. This information does not replace legal advice. Consider consulting an attorney for your specific situation.

Why Most Debt Lawsuits Can Be Resolved Successfully

About 70% of people who properly respond to debt lawsuits achieve favorable outcomes.

They settle for less. They get cases dismissed. They avoid default judgments.

The problem? Most defendants don’t know how to navigate the court system. They miss deadlines. They file incorrect paperwork.

A $1,000 debt can balloon into a $3,600 judgment overnight. Interest compounds. Court fees add up. Wage garnishment begins.

You can avoid this outcome with the right strategy.

Your Three Main Options to Fight Back

You have three powerful tools when facing a debt lawsuit:

File an Answer Document

An Answer responds to the complaint filed against you. You address each claim the collector makes.

You deny allegations you disagree with. You assert your defenses. You preserve your right to fight.

Filing an Answer stops a default judgment. The collector must now prove their case.

Compel Arbitration

Many credit card agreements include arbitration clauses. You can force the case into arbitration instead of court.

Arbitration is often simpler than civil court. The plaintiff typically pays the fees.

Many collectors dismiss cases rather than pursue arbitration. The cost doesn’t justify the debt amount.

Settle the Debt

You can negotiate directly with the collector. Offer a lump sum payment for less than you allegedly owe.

Settlements provide the cleanest resolution. You avoid trial. You get written confirmation the debt is resolved.

Most collectors accept 30-50% of the original debt. Some settle for even less.

Common Questions About Resolving Debt Lawsuits

What If I Don’t Actually Owe This Debt?

You’re not alone. The Consumer Financial Protection Bureau reports that 50% of sued consumers claim they don’t owe the debt.

File an Answer denying the allegations. The burden of proof sits with the collector.

They must prove you owe the debt. They must show proper documentation. They must establish the debt amount.

Consider filing a Motion to Dismiss. Attend all hearings. Argue that the plaintiff cannot meet their burden of proof.

Monitor your court docket online. Courts sometimes post documents before mailing them. You might miss crucial deadlines if you rely only on mail.

How Long Until I Hear Back After Filing My Answer?

Most lawsuits resolve within four to six months after filing. Expect the collector’s next move within one month.

But timelines vary wildly. Some collectors wait years before taking action.

They hope you’ll move and miss notifications. They want you to forget about the case. They count on you defaulting eventually.

Don’t wait passively. Make a settlement offer through our partner Solo to control the timeline.

What Happens After Filing a Motion to Compel Arbitration?

The court will likely grant your motion if your credit agreement includes arbitration language.

The judge may order you to initiate arbitration. You’ll need to select an arbitration organization. You’ll follow their procedures.

Many collectors ask for dismissal at this point. Arbitration costs more than the debt is worth.

Keep moving things forward. The court might send the case back to civil court if you stall.

Can I Settle Debt That Isn’t in a Lawsuit Yet?

Yes. Settlement works for any debt stage.

You can negotiate before a lawsuit. You can settle during litigation. You can even settle after a judgment.

Lump sum offers get the best deals. Collectors prefer immediate payment over payment plans.

Offer 25-40% of the balance for old debts. Start low. The collector will counter if interested.

What Should I Prepare for My Court Hearing?

Show up. That’s the most critical step.

Many people lose simply because they miss their hearing. They oversleep. They get the time wrong. They have car trouble.

For Zoom hearings, test your technology beforehand. Charge your laptop. Check your internet connection. Log in early.

Your main argument: The collector cannot prove the debt. They lack proper documentation. They bought the debt from another company. They don’t have the original contract.

Bring any records supporting your position. Bring collection letters. Bring account statements. Bring proof of payment if you already paid.

Can I File a Counterclaim Against the Collector?

You might have grounds for a counterclaim. Collectors sometimes violate the Fair Debt Collection Practices Act (FDCPA).

Each FDCPA violation carries a $1,000 penalty. They might have called excessively. They might have contacted your employer improperly. They might have threatened illegal action.

File counterclaims early in the case. You typically lose this right if you wait too long.

You could also sue for frivolous lawsuits. If they sued the wrong person or lack standing, you might recover damages.

Does Being on Social Security Protect Me?

Social Security income has some protections from garnishment. But collectors still sue Social Security recipients.

They obtain judgments that last 10+ years. Most states allow infinite judgment renewal.

If you acquire assets later, they can collect. If you inherit money, they can garnish it. If you start working again, they can take wages.

Being judgment-proof today doesn’t mean staying judgment-proof forever. Settle the debt if possible.

What Is a Motion for Summary Judgment?

A Motion for Summary Judgment asks the judge to rule without a trial. You argue that no genuine dispute of material facts exists.

You’re saying the other side has no case whatsoever. They lack standing. They sued the wrong person. They have zero evidence.

Summary judgment is harder to win than a Motion to Dismiss. You need strong arguments and evidence.

Present your case clearly. Show why the plaintiff cannot possibly prove their claims.

How Filing Fees and Service Costs Work

About 25% of states charge Answer filing fees. California fees range from $181 to $450.

Most other states require no fee to file your Answer. Check your local court rules.

Professional filing services charge $50-250 for Answer preparation and filing. Premium services include attorney review of your document.

Attorney review catches critical mistakes. You might accidentally admit something you should deny. You might miss key defenses.

Settlement negotiation services typically charge 15-20% of the total debt. You only pay if the settlement succeeds.

Finding Your Court Docket Online

Most courts maintain online case search portals. Search for “[Your State] court case search” to find yours.

Enter your case number or your name. You’ll access the docket showing all filed documents.

The docket lists upcoming hearings. It shows filing dates. It includes copies of documents in many jurisdictions.

Check your docket weekly. Collectors might file motions without mailing you copies. Courts might schedule hearings you don’t know about.

Some rural courts lack online systems. Call the clerk’s office or visit in person to check your case status.

Why Acting Quickly Matters Most

You typically have 20-30 days to respond to a lawsuit. Miss this deadline and you lose automatically.

Default judgments happen fast. The collector wins without proving anything. Wage garnishment begins immediately.

Your bank account gets frozen. Your paycheck gets reduced. Your assets face liens.

Responding on time preserves all your options. You can still settle. You can still fight. You can still win.

Don’t let fear or confusion stop you. Our partner Solo makes the process straightforward.

The Debt Settlement Advantage

Settlement offers benefits both sides want. Collectors get immediate payment. You pay less than the full amount.

Most importantly, settlement ends the uncertainty. No trial. No judgment. No garnishment risk.

Make your first offer low. Try 25-30% for debts over two years old. The collector will counter if interested.

Only agree to amounts you can actually pay. Get everything in writing before sending money.

The settlement agreement should state the debt is satisfied in full. No balance remains. They report the account as settled to credit bureaus.

Never make partial payments without a written settlement agreement. Partial payments restart the statute of limitations clock.

Special Considerations for Credit Card Arbitration

Review your credit card agreement before filing for arbitration. Most major issuers include arbitration clauses.

The agreement usually requires the creditor to pay arbitration fees. These fees often exceed the debt amount.

Capital One, Discover, and many other issuers use arbitration clauses. Debt buyers who purchase these accounts remain bound by the original terms.

After you file a Motion to Compel Arbitration, the court typically stays the lawsuit. You must then initiate arbitration proceedings.

Select an arbitration organization like AAA or JAMS. Follow their filing procedures. Pay any required consumer fees (usually $200-300).

Many collectors dismiss at this stage. Fighting in arbitration costs more than the debt is worth.