Being sued over a debt is scary, and many people respond by doing nothing. That’s the most expensive choice. When you don’t respond, the court can decide against you without hearing your side, and the creditor can then use the court’s power to collect.
This guide covers what to do from the day you receive court papers.
Step 1: Read the papers and find the deadline
A lawsuit usually starts with two documents: a summons and a complaint. The summons tells you which court the case is in and how long you have to respond. The complaint says who is suing you, how much they claim you owe, and why.
Find the response deadline first and write it down. Deadlines vary by state and court. In some courts you have a few weeks. In others, less. The Consumer Financial Protection Bureau (CFPB) says to respond by the date in the court papers, either yourself or through a lawyer.
Step 2: Confirm the lawsuit is real
Fake lawsuit threats are a common scam. Check the papers against the court itself:
- Look up the court’s phone number on its official website, not the number printed on the papers.
- Call the clerk and ask whether a case with that number exists under your name.
- Many courts also let you search cases online.
If the case is real, keep going. If it isn’t, report the scam to the FTC at ReportFraud.ftc.gov.
Step 3: Understand what happens if you ignore it
If you miss the deadline, the court can enter a default judgment. The CFPB says that judgment can include the amount claimed plus fees, interest, and attorney’s fees, and you may lose the chance to dispute the debt or the amount. Depending on your state, the creditor may then be able to:
- Garnish your wages
- Freeze money in your bank account
- Put a lien on your property
A judgment is a court order, and the CFPB notes it can be very hard to change once the case is over. You have a much better chance while the case is still open.
Responding doesn’t mean you agree that you owe the money. Once you respond, the collector has to prove to the court that the debt is valid.
Step 4: File your answer
Your response is usually called an answer. It goes to the court, with a copy to the other side, and it responds to each claim in the complaint. Many courts have fill-in answer forms for debt cases on their websites or at the clerk’s office. Some charge a filing fee and let you ask for a waiver if you can’t afford it.
In your answer, you can admit, deny, or say you don’t have enough information about each claim. You can also list defenses. Common ones in debt cases include:
- The debt isn’t yours, or the amount is wrong.
- The statute of limitations has passed. Each state limits how long a creditor has to sue. The CFPB says you have to raise this defense yourself. If you don’t show up and raise it, the court can rule against you anyway.
- The plaintiff can’t prove it owns the debt. Debts get sold, sometimes more than once. A debt buyer may need to show the chain of ownership.
- You already paid or settled the debt.
- Identity theft. Someone else opened the account.
Get legal help before you decide which defenses to raise.
Step 5: Get legal help, even for a short consult
You don’t need to hire a lawyer to answer a lawsuit, but a short consultation can change the outcome. The CFPB suggests these places to look:
- Legal aid programs in your state, which help people with low incomes for free if they qualify
- Your state or local bar association’s lawyer referral service
- Lawyers who practice consumer law, debt collection defense, or the Fair Debt Collection Practices Act
- Your local JAG office if you’re in the military
Some consumer lawyers take cases without up-front fees when the collector broke the law. Ask about fees before you agree to anything.
Step 6: Go to every court date
Show up on time with copies of your papers, your answer, and any proof: payment records, letters, and your notes from calls with the collector. If the collector doesn’t show up or can’t prove its case, the court may dismiss it.
Settling before the judge rules
If you owe the money, you can still negotiate while the case is open. Collectors often accept a settlement or payment plan to avoid the cost of going to trial. If you reach a deal:
- Get the full agreement in writing before you pay.
- Make sure it says how the court case will end, usually by dismissal.
- Confirm the court record shows the case was dismissed or satisfied.
If a judgment is already entered
A judgment doesn’t mean the creditor can take everything. Federal and state law protect some income.
Wages. For ordinary debts, federal law caps garnishment at 25% of your disposable earnings, or the amount by which your weekly disposable pay exceeds 30 times the federal minimum wage, whichever is less. The Department of Labor says that at the current $7.25 minimum wage, weekly disposable earnings of $217.50 or less can’t be garnished at all. Some states protect more. Different limits apply to child support, taxes, and federal student loans.
Your job. Federal law bars your employer from firing you because your wages are garnished for any one debt.
Federal benefits. When Social Security, SSI, VA benefits, and some other federal payments are direct deposited, the CFPB says your bank has to protect two months of those benefits from a garnishment order. If you deposit paper benefit checks, that automatic protection doesn’t apply.
If your wages or bank account are garnished, you should receive a notice explaining how to claim exemptions. Respond by the deadline in the notice, and get legal help.
In some cases you can ask the court to set aside a default judgment, for example if you were never properly served. Deadlines for this are short, so talk to a lawyer or legal aid office right away.
When bankruptcy is on the table
If you face several lawsuits or debts you can’t repay, talk to a bankruptcy lawyer. Filing bankruptcy generally pauses collection actions, including most lawsuits. Our guide to debt relief options explains how bankruptcy compares with credit counseling and debt settlement.
Checklist
- Write down the response deadline
- Confirm the case with the court clerk
- File an answer before the deadline and send a copy to the other side
- Contact legal aid or a consumer lawyer
- Collect your records
- Attend every hearing
For more on dealing with collectors outside court, see your rights when a debt collector contacts you.
