How to Resolve Your Debt Lawsuit: Expert Q&A Session

Debt collectors file thousands of lawsuits every month. You need to know how to fight back effectively.

The most common questions about debt lawsuits get answered here. You’ll learn what to do after being served, how to respond properly, and what happens next.

Understanding Your Debt Lawsuit Response Options

When you receive a Complaint and Summons, you have limited time to act. Most states give you 14 to 30 days to respond.

You must file a formal Answer document. A handwritten letter won’t protect you. A phone call to the lawyer won’t work either.

Without a proper response, you automatically lose by default judgment. The court rules against you because you didn’t defend yourself.

What You Can Do to Fight Back

You have three main options when facing a debt lawsuit:

• File an Answer document to dispute the claims
• Submit a Motion to Compel Arbitration if applicable
• Negotiate a settlement before the court date

Most people who file an Answer see better outcomes. About 25% of cases get dismissed after filing a response.

You can work with our partner Solo to create your Answer document. The process takes about 15 minutes online.

Common Questions About Responding to Debt Lawsuits

Can I Sue a Debt Collector?

Yes, you can always file a lawsuit in the US court system. Whether you’ll win depends on your case.

If a collector already sued you, file a counterclaim within your existing case. You can countersue for bad practices or violations.

If they haven’t sued you yet, you can start your own lawsuit. Finding an attorney to represent you might prove difficult.

Before suing, send a Debt Validation Letter. You have the right to demand proof under the FDCPA.

The collector must validate the debt or stop contacting you. Send the letter via certified mail with return receipt.

What Happens After I File My Answer?

You have several paths forward after filing your Answer document. Settlement often provides the best outcome if you owe part of the debt.

You can send a settlement offer immediately after your Answer. Collectors often negotiate once you’ve shown you’ll fight back.

Our partner Solo offers tools to help you settle your debt lawsuit. An attorney can even represent you at your hearing.

If you don’t owe the debt at all, keep fighting. File additional motions to challenge their evidence.

What If I Was Never Properly Served?

Improper service happens more often than it should. Some process servers commit “sewer service” by faking delivery.

You might discover the lawsuit after losing by default judgment. Or you might find out late in the process.

If you still have time to Answer, respond immediately. Contact your court to check your case status online.

If the deadline passed, file a Motion to Set Aside Judgment. You’re arguing the court should reopen your case.

Can I Settle Without Filing an Answer?

Settlement works better after you file an Answer document. You gain leverage by showing you’re willing to fight.

Many collectors won’t negotiate seriously without an Answer on file. They assume you’ll let them win by default.

If your court date is approaching, you can still act. File your Answer first, then immediately pursue settlement.

Working with an attorney through our partner Solo can expedite both processes. They handle the Answer and negotiate settlement simultaneously.

What Happens If I Ignore a Judgment?

Ignoring a judgment doesn’t make it disappear. The winner must collect, but they have powerful tools available.

Collectors can garnish up to 25% of your wages. They file paperwork with your employer, who sends payment directly to them.

They can also place liens on property you own. When you sell, the judgment gets paid first from proceeds.

Judgments typically last 10 to 20 years. Most states allow infinite renewals after expiration.

Billions of dollars in judgments go uncollected annually. But don’t count on collectors giving up easily.

Dealing With Specific Debt Lawsuit Situations

Car Loan Debt After Repossession

Financed vehicles involve three parties: you, the dealer, and the lender. The bank owns most of the car until you finish payments.

Returning your car to the dealer doesn’t cancel your loan. The bank still expects payment on their portion.

You must communicate with the lender directly about returning the vehicle. Otherwise, you remain liable for the full balance.

If you’re being sued over car loan debt, file an Answer immediately. Then explore settlement options with the lender.

Filing Your Answer Correctly

Include a copy of the original Complaint when you mail your Answer. Send copies to both the court and the plaintiff’s attorney.

Include a Certificate of Service showing when and how you delivered copies. This proves you followed proper procedures.

Most courts don’t require additional documentation with your Answer. The Answer itself is your formal response.

Keep copies of everything you file. Track your mailing with certified mail, return receipt requested.

Preparing for Your Court Hearing

A pretrial conference includes you, the plaintiff, and the judge. You’ll discuss settlement attempts and scheduling.

The judge asks if you tried negotiating. If settlement failed, the court sets a trial date.

Bring all relevant documentation to the pretrial. Dress professionally and arrive early.

Decide before the hearing whether you want to settle. Know your bottom line and maximum payment ability.

When the Debt Collector Goes Silent

Collectors sometimes stop responding after you file an Answer. They might be overwhelmed or reconsidering the case.

Most states require responses within 30 days generally. But enforcement varies by jurisdiction.

If they take too long, file a Motion to Dismiss for Lack of Prosecution. You’re asking the court to close the case.

Check your state’s Rules of Civil Procedure for specific deadlines. Your court clerk can direct you to these rules.

Advanced Defense Strategies

Using the Statute of Limitations

Every state limits how long collectors can sue over old debts. The statute of limitations varies from three to ten years.

The clock starts from your last payment or account activity. Once expired, the debt becomes “time-barred.”

If your debt exceeds the statute of limitations, raise this defense aggressively. File your Answer, then argue this point at every hearing.

Proving the expiration date wins your case completely. About 25% to 30% of cases get dismissed for various reasons.

Responding to Discovery Requests

Request for Admissions and Interrogatories come during the discovery phase. Collectors seek evidence to strengthen their case.

You must respond to these requests within the deadline. Usually you have 30 days from receiving them.

Respond carefully to each Request for Admission. You can admit, deny, or state you lack sufficient information.

Consider hiring an attorney if discovery becomes complex. Our partner Solo can connect you with representation for these situations.

Filing Additional Motions

You can file a Motion to Compel Arbitration if your original contract includes an arbitration clause. Most credit card agreements contain these provisions.

Arbitration increases the collector’s costs significantly. They might drop the case rather than pay arbitration fees.

File your Motion to Compel immediately after your Answer. Don’t wait for the collector to make the next move.

You can also file a Motion to Dismiss if you have strong grounds. Lack of standing or expired statute of limitations justify dismissal.

Settlement Strategies That Work

Timing Your Settlement Offer

The best time to settle is right after filing your Answer. You’ve shown strength by responding properly.

Collectors become more flexible once they know you’re fighting back. They recalculate the cost of pursuing the case.

Even after a judgment, settlement remains possible. Offer a lump sum payment for less than the full amount.

Collectors prefer guaranteed payment over uncertain wage garnishment. A lump sum today beats chasing you for years.

How Much to Offer

Start your offer at 30% to 50% of the claimed debt. Collectors often accept 50% to 70% in settlement.

Lump sum payments get better discounts than payment plans. Gather available funds before making your offer.

Document everything in writing before paying. Get confirmation the settlement resolves the entire debt.

Never send money without a written settlement agreement. Verbal promises don’t protect you legally.

Getting Professional Help With Settlement

Settlement negotiations can feel overwhelming when you’re stressed. Professional negotiators understand collector tactics and leverage points.

Working with our partner Solo gives you access to experienced attorneys. They handle all communication with the collector.

Attorneys can often negotiate better terms than you can alone. They know what collectors will accept.

Professional representation also protects you at hearings. Your attorney appears in court so you don’t have to.

What to Do When You Can’t Pay

Understanding Your Judgment Options

Even after losing a lawsuit, collectors face challenges collecting money. They must take additional legal steps to access your assets.

Wage garnishment requires filing a separate writ with your employer. Property liens require recording documents with county offices.

Each collection attempt costs the collector time and money. Many judgments never get collected despite being valid.

You’re not helpless even with a judgment against you. You can still negotiate settlement at any point.

Paying Off a Judgment

Contact the collector directly to arrange payment. Call their customer service line and request payment instructions.

Many collectors accept online payments through their websites. You can also mail certified checks to their payment address.

Get written confirmation that your payment satisfies the judgment. Request a Satisfaction of Judgment document for court filing.

The collector should file this satisfaction with the court. Follow up to ensure they complete this final step.

When You Need More Time

Request a payment plan if you can’t pay a lump sum. Collectors often agree to monthly installments.

Expect to pay interest on payment plans. The judgment likely accrues interest at your state’s legal rate.

Make every payment on time once you agree to a plan. Missing payments triggers immediate collection actions.

Consider whether bankruptcy might help your overall situation. If you owe multiple debts, bankruptcy could provide relief.

Special Situations and Edge Cases

Business Debts With Personal Guarantees

Personally guaranteeing a business loan makes you individually liable. Collectors can pursue your personal assets even after business bankruptcy.

Business bankruptcy doesn’t discharge your personal guarantee. You need personal bankruptcy for that protection.

If you’re being sued personally for business debt, respond immediately. The same rules apply as consumer debt lawsuits.

Professional representation becomes even more valuable with business debts. The amounts involved typically justify legal fees.

Disputed Signatures and Fraud Claims

If you didn’t sign the original contract, raise this defense immediately. Someone else signing doesn’t make you liable.

Collectors must prove you entered the agreement. Question every document they present as evidence.

Request the original signed contract during discovery. Copies alone may not satisfy their burden of proof.

Identity theft victims should file police reports immediately. Fraud claims require documentation beyond your testimony.

Dealing With Difficult Attorneys

Some plaintiff attorneys use aggressive tactics to intimidate you. They hope you’ll give up or agree to unfavorable terms.

Stay calm and professional in all communications. Document every conversation and keep copies of all correspondence.

You don’t have to speak with opposing counsel directly. Direct them to communicate in writing only.

If harassment continues, report violations to your state bar association. Attorneys must follow ethical rules.

Taking Action on Your Debt Lawsuit

Time is your enemy when facing a debt lawsuit. Every day you wait reduces your options.

Start by filing your Answer document before the deadline. You protect yourself from automatic default judgment.

Then decide whether to fight or settle based on your situation. Both paths can lead to favorable outcomes.

You don’t have to face debt collectors alone. Professional help is available and often affordable.

Thousands of people successfully resolve debt lawsuits every month. You can be one of them with the right approach.