Sued for debt collection: what to do first
Sued for debt collection? Here are the steps that keep your options open. You can respond, defend yourself, and avoid a default judgment.
- The deadline to answer differs by state, and most states give you between two and five weeks to file.
- The debt collector has to prove you owe the debt and that they can collect it from you.
- Doing nothing is the worst choice, because most people who ignore a debt collector lawsuit lose by default.
Being sued for debt collection is scary, and you are not alone in that. Many people get sued for a debt each year across the country.
People search for this with many words. Common phrases are sued for debt collection, sued by debt collector, and being sued by debt collector. The phrase debt collector lawsuit covers the same thing.
Most people do nothing after a debt collector files a lawsuit, and many lose by default. You still have time to act, and this guide walks you through the first steps.
What a debt collection lawsuit is
A debt collection lawsuit is a civil case. A debt collector files it in a court to collect a debt they say you owe. The person suing you is the plaintiff, and you are the defendant.
A case can come from an original creditor, a collection agency, or a debt buyer. An original creditor is the bank or company that gave you the loan. Debt collection agencies and debt buyers are later third parties that try to collect the debt.
Most states hear these cases in a civil court or a small claims court. Rules on where to file a lawsuit and how to answer differ by state.
The first thing to do if you are sued by a debt collector
Read the papers right away. The two main papers are a summons and a complaint.
The summons names your court and tells you that you are being sued. The complaint lists what the debt collector claims you owe and why.
Mark the answer date on your calendar in big letters. The deadline to respond to the lawsuit differs by state. In most states, you get between two and five weeks to file a short written answer.
Count from the day the papers were served, not the day they landed in your mailbox.
Make sure the papers look real before you do anything else. A valid summons names a real court and carries a case number.
Call the court clerk yourself and ask if the case is on file. Never call a number printed on the papers by the debt collector to check.
Why a debt collector lawsuit does not go away
If you miss the answer deadline, the court can enter a default judgment against you. A default judgment is a court order that says you owe the money without any trial at all.
A judgment lets the collector collect the debt in harder ways. In most states, the collector can garnish wages after it wins a judgment. In many states, it can also freeze some bank funds and place a lien on property.
Ignoring a lawsuit almost always ends with a default against you. Filing a short answer by the deadline puts you back in control of the case.
The deadline to sue (statute of limitations)
The law gives a collector a limited time to sue after a debt goes unpaid. The window is called the statute of limitations. It differs by state and by the type of debt you have.
In most states, the window runs a few years from the last payment on the account. If the debt is too old, you can raise the statute of limitations as a defense. The debt is still owed on paper, but the collector cannot win in court on it.
Here is a trap to watch for before you talk to any collector. A small payment or a signed promise to pay can restart the clock in some states.
More states now bar restarting a debt that is past the deadline. Many states still allow a late payment to bring back an old debt.
Do not pay the debt or sign anything on an old account before you check your own state's rule. The safe step is to wait, read, and ask first.
Can they prove you owe the debt?
A debt collector must prove the case before any judge rules against you. They must show you owe the debt and that they can collect it. The judge does not take their word for it on either point.
For a debt buyer suit, this often turns on the paperwork they bring to court. The debt buyer must show the chain of sale from the original creditor to them. They must also show that their records follow the business records rule.
You can push back on the paperwork directly. You can ask for the papers in writing. You can object if the papers are missing or do not add up.
The business records rule is federal in form at Federal Rule of Evidence 803(6). Almost every state follows the same basic shape of the rule, but the details differ by state.
Tools and protection you have
Federal law gives you several real tools. The main one is the Fair Debt Collection Practices Act, or FDCPA. The FDCPA bars many kinds of debt collector abuse by third parties.
The FDCPA also gives you the right to dispute the debt and to make the collector verify it. These rights apply to third-party debt collection agencies and debt buyers. They do not cover a creditor collecting its own debt.
Within 30 days of getting that first collection notice, you can mail the collector a written dispute. Once you dispute in writing, the collector must stop until it mails you written verification. The rule is at 15 U.S.C. § 1692g.
Federal law also limits wage garnishment after a judgment. If a collector has a judgment, federal law caps most wage garnishment at 25% of weekly take-home pay. Some states cap less, and a few states ban wage garnishment on most consumer debt.
Rules about which money is safe differ a lot by state. Social Security, veterans benefits, and some other federal benefits paid by direct deposit carry added protection by federal rule. See 31 C.F.R. Part 212.
A quick plan for the first 30 days
- Day 1: Read the papers right away, and mark the answer deadline on your calendar in big letters.
- Day 2: Write down the facts, and note the name on the papers, the account, and your last payment date.
- Within one week: Get your free credit report at annualcreditreport.com, since it is free once a year by federal law.
- Within two weeks: Write and file a short answer with the court. Keep a stamped copy for your own records.
- Through the month: Do not pay the debt or sign anything on an old account. Check your state's deadline to sue first.
Where to look next
Each stage of a debt case has its own page here on Debt Dismissed:
- Being served the papers
- Answering the lawsuit
- Common defenses
- Discovery
- Settlement
- Judgment and after
When to get a lawyer
Your state bar can refer you to a lawyer who handles consumer debt cases. Legal aid offices help people who meet income limits. The Consumer Financial Protection Bureau at consumerfinance.gov lists other options.
Readers who need a lawyer should look to those options. Debt Dismissed is here to teach, and it does not take cases.
Questions people ask
What should I do first if sued by debt collector?
Read the papers and mark the deadline on your calendar. The deadline to answer differs by state. Most states give you between two and five weeks to file an answer with the court.
Does a debt collector lawsuit mean I owe the debt?
No, a lawsuit is a claim, not proof. The debt collector must still prove the case in court. They must show the debt is real and that they can collect it from you.
Can a debt collector garnish my wages right away?
No, the collector must win a judgment first. After a judgment, federal law caps most wage garnishment at 25% of your weekly take-home pay. Some state rules protect more of your pay.
What is the FDCPA?
FDCPA stands for the Fair Debt Collection Practices Act. It is a federal law that bars many kinds of debt collector abuse by third-party collection agencies and debt buyers. It also gives you the right to dispute the debt and to make the collector verify it.
How long does a debt collector have to sue me?
The window differs by state and by the type of debt. In most states, the window for an unpaid credit card runs a few years from the last payment. The window is called the statute of limitations.