Being served with a debt collection lawsuit can be frightening, but how you respond determines whether you have any chance of defending yourself or negotiating favorable terms. Many people ignore these lawsuits out of fear or uncertainty, only to face default judgments that give creditors powerful collection tools including wage garnishment and bank account seizures. Understanding how to respond to a debt lawsuit protects your rights and maximizes your options for resolving the situation.
Understanding the Lawsuit Documents
A debt collection lawsuit begins with a summons and complaint that must be served on you. The summons tells you that you are being sued and how long you have to respond. The complaint contains the creditor's allegations about the debt, how much they claim you owe, and the legal basis for their claim.
Read these documents carefully. The complaint should identify the original creditor, the account, and the amount owed. If the debt has been sold, it should identify the chain of ownership. Note any discrepancies or information that seems incorrect. These details may be important for your defense.
The Critical Deadline
The summons specifies how long you have to file a written response, typically twenty to thirty days depending on your state. This deadline is critical because missing it allows the creditor to obtain a default judgment against you without any hearing on the merits. Default judgments are extremely difficult to undo later.
Mark the deadline on your calendar immediately and count carefully from the date you were served. Do not assume you have extra time. If you cannot prepare a full response by the deadline, at minimum file a general denial to preserve your right to defend yourself. You can always amend your answer later.
Preparing Your Answer
Your answer is a written response to the complaint that addresses each allegation and raises any defenses you have. For each allegation, you typically admit, deny, or state that you lack sufficient information to admit or deny. You are not required to admit anything you are unsure about.
Common defenses in debt collection cases include statute of limitations, lack of standing if the plaintiff cannot prove they own the debt, incorrect amount, improper service, and identity issues if the debt belongs to someone else. Your answer should also include any affirmative defenses, which are legal reasons why even if the allegations are true, the plaintiff should not win.
Statute of Limitations Defense
Every debt has a statute of limitations after which the creditor cannot sue to collect. This is an affirmative defense you must raise in your answer; the court will not apply it automatically. If the limitations period has passed, this defense can defeat the entire lawsuit.
The applicable limitations period depends on the type of debt and often the state where the contract was formed or where you reside. Credit card debt typically has limitations periods of three to six years, though some states have longer periods. Calculate carefully from when the debt became delinquent, not when it was incurred. Making payments or acknowledging the debt may restart the clock.
Lack of Standing Defense
Many debt collection lawsuits are brought by debt buyers who purchased portfolios of defaulted accounts. These buyers must prove they actually own your specific debt through documentation showing the chain of assignments from the original creditor. This documentation is often incomplete or missing.
Challenge the plaintiff to prove they have standing to sue you by demanding documentation of the assignment. Generic bills of sale for entire portfolios may not be sufficient to prove ownership of your specific account. Without proper documentation, the plaintiff cannot prove they have the right to collect from you.
Requesting Documentation
Through the discovery process, you can request documents supporting the plaintiff's claim. Ask for the original signed credit agreement, account statements showing how the balance was calculated, documentation of the chain of ownership if the debt was sold, and proof that the amount claimed is accurate.
Many debt buyers purchased accounts with minimal documentation and cannot provide what you request. Missing or inadequate documentation weakens the plaintiff's case and may lead to dismissal or favorable settlement. Use discovery strategically to test whether the plaintiff can actually prove their claim.
Appearing in Court
If your case proceeds to a hearing, you must appear or risk default judgment. Arrive on time, dress appropriately, and bring copies of all relevant documents including your answer, any motions filed, and evidence supporting your defenses.
Many debt collection cases are resolved at the first hearing through settlement or dismissal when the creditor cannot prove their case. Be prepared to present your defenses clearly and concisely. Even if you cannot win outright, demonstrating that you have defenses often leads to better settlement offers than what was previously available.
Settlement Options
Many debt collection lawsuits settle before trial. Settlement may involve a lump sum payment for less than the full amount claimed, a payment plan spread over time, or occasionally dismissal if the creditor's case is weak enough.
If you want to settle, be realistic about what you can afford and get any agreement in writing before making payments. Ensure the settlement agreement specifies that the remaining balance will be forgiven and the lawsuit will be dismissed with prejudice. An attorney can help negotiate favorable settlement terms and ensure the agreement protects your interests.
When to Hire an Attorney
While you can represent yourself in debt collection lawsuits, an attorney provides significant advantages. Attorneys understand procedural rules, can identify defenses you might miss, and know how to use discovery and motions effectively. Many consumer attorneys offer free consultations and some handle these cases on contingency.
If you have defenses like statute of limitations or lack of documentation, an attorney can maximize the value of these defenses. If you owe the debt and need to settle, an attorney can often negotiate better terms than you could alone. The investment in legal help often pays for itself through better outcomes.