Sued by a debt collector: what to do in the first two weeks

The most expensive mistake in a debt lawsuit is doing nothing. People skip the court date because they assume they’ll lose anyway, or because they can’t pay, or because the papers came from a company they’ve never heard of. In effect, the court treats silence as agreement, and the collector wins without having to prove a thing.

This page covers what to do in the first days after you’re served. It is general information, not legal advice. Court rules differ by state and even by county, and a local lawyer or legal aid office can tell you exactly what your court requires.

What happens if you don’t respond

The CFPB lays out the sequence. If you don’t respond by the date in the court papers, the court may enter a default judgment. That judgment would likely cover the amount claimed plus collection costs, interest, and attorney fees the law allows. Depending on your situation and state law, the creditor may then be able to:

• garnish your wages,
• place a lien on your property, or
• move to freeze funds in your bank account.

You may also lose the chance to dispute the debt or the amount. The CFPB calls a judgment “very hard to change or set aside after the case ends.” The FTC says the same in fewer words: “respond and don’t ignore the lawsuit.”

Refusing to accept the papers doesn’t help either. The CFPB says a court may treat that as ignoring a properly served lawsuit.

Read the papers for these details first

You were probably handed a summons and a complaint. Before you do anything else, pull out these items:

If anything on the papers is unclear, the court clerk’s office or a court self-help center can usually explain filing procedures, though they can’t give legal advice.

Your first week, step by step

1. Put the deadline on your calendar, with a reminder several days earlier.
2. Call for legal help now, not the day before. Legal aid offices and legal clinics may represent you for free if you qualify; the CFPB points to the Legal Services Corporation’s finder at lsc.gov/find-legal-aid. Servicemembers can contact a JAG legal assistance office. The CFPB also says some private attorneys offer free or reduced-fee help; look for one with Fair Debt Collection Practices Act experience.
3. Collect your records. Statements, payment confirmations, letters from the creditor or collectors, any settlement agreement, any bankruptcy papers.
4. Work out the age of the debt. Find your last payment and the month you first fell behind. That’s what tells you whether the statute of limitations is in play.
5. File your response in the form your court requires, by the deadline. In many courts that is a written answer responding to each claim in the complaint. Some courts use a simpler appearance form or let you respond at a first hearing. Your papers or the clerk will say which.
6. Send a copy to the collector’s attorney if your court’s rules require it, and keep proof that you did.
7. Show up to every hearing. Filing an answer and then missing a hearing can still cost you the case.

Responding doesn’t mean you agree that you owe the debt. As the CFPB puts it, the collector “has to prove to the court that the debt is valid.”

Defenses people commonly raise

Whether any of these apply to you is a question for a lawyer. These issues come up often in consumer debt cases:

• The statute of limitations has run. Reg F bars collectors from suing on time-barred debt, but the CFPB says a court may still enter judgment if you don’t appear and raise the defense, and it is generally up to you to raise it. See the statute of limitations guide.
• It isn’t your debt. Identity theft, a mixed file, or a different person with a similar name.
• The amount is wrong. Unsupported interest or fees, or payments that weren’t credited.
• The plaintiff can’t show it owns the debt. Debts that have been sold several times sometimes arrive in court with a thin paper trail.
• The debt was paid, settled, or discharged in bankruptcy.
• The suit was filed in the wrong place under 1692i.

If you asked for debt validation before the suit and never got a real answer, keep that correspondence. It can matter.

Settling the case

Responding to the suit doesn’t close the door on a deal. The CFPB notes you may be able to negotiate a settlement before a judgment is entered. If you owe the money and can pay something, a written agreement can end the case on terms you can live with.

Before you agree to anything:

• Get the terms in writing: the amount, the payment schedule, and what happens if you miss a payment.
• Find out how the case will be closed. A dismissal is different from an agreed judgment that the collector can enforce later.
• Keep responding to the court until the case is actually closed. A phone promise from the collector’s lawyer does not stop your deadline.

Settling a debt for less than you owe covers how to approach the number.

If a judgment already happened

Talk to a lawyer or legal aid quickly. Some courts will reopen a judgment in limited situations, such as when you were never properly served, and those requests usually come with tight deadlines.

If a collector tries to garnish, some income is protected. The FTC says many federal benefits, including Social Security, Supplemental Security Income, and veterans benefits, are generally exempt from court-ordered garnishment, except for things like delinquent taxes, child or spousal support, and student loans. State law may protect more.

And if the collector broke the rules along the way, by suing on a time-barred debt, threatening action it never intended to take, or misstating what you owe, you may have a claim of your own. What debt collectors can and can’t do lists the federal limits, and the CFPB accepts complaints about collectors at consumerfinance.gov/complaint.