If you have defaulted on a debt, chances are you can get sued by a debt collector. If you lose the case in court, the court can garnish your wages, put a lien on your assets, or seize your bank account. To avoid these consequences, you need to respond to the lawsuit, prepare a solid defense, and show up to your hearings. A competent lawyer can help you throughout the process and can represent you in court.

What Happens When a Debt Collector Sues You?

If you’re getting sued by a debt collector, it’s important for you to be aware of what the collection process usually looks like so you can prepare yourself.

  • You’ll receive debt collector calls or mail to start with to notify you about the debt once your account is 180 days past due.
  • You can request them to send you a debt validation letter by certified mail stating the name of the original creditor and the amount you owe.
  • If the debt is legitimate and you do not pay it off, negotiate a payment plan, or settle the account, the debt collector can take legal action.
  • You’ll receive a complaint, and then a court summons.
  • If you do not respond to the summons and do not appear in court, it can result in a default judgment.
  • If you respond, you must send an answer or a notice of appearance. Read the instructions in the summons and complaint carefully to ensure you know the deadlines.

Consequences of Being Sued by a Debt Collector

When a debt collector files a lawsuit against you, they’re trying to get the court to enforce collection. It’s crucial to respond to the lawsuit before the specified deadline mentioned in the summons. Not doing so means the court will pass a default judgment against you. This can come in the form of:

  • Wage garnishment
  • Bank account freezes
  • Property liens

If you respond to the lawsuit, you may still have options at your disposal, such as challenging the lawsuit or getting the lawsuit dismissed with the help of a law firm. More importantly, you may be able to protect your assets and avoid these consequences if you respond to the lawsuit.

What To Do to Fight Back a Debt Collection Lawsuit

Whether you’re being sued by a debt collector for credit card debt, personal loans, student loans, or medical bills, it’s important to know your rights as a borrower, hire a lawyer, and have a plan in place to deal with it successfully.

1. Understand Your Legal Rights

The Fair Debt Collection Practices Act (FDCPA) is a federal law that regulates the activities of debt collectors. It’s important to know what a debt collector can and cannot do to collect a debt. For example, debt collectors cannot sue you after the statute of limitation has passed. They cannot threaten you or use obscene language. If a debt collector uses unlawful collection practices, you can file a complaint against them with the Federal Trade Commission (FTC). It’s a good practice to keep note of all your communications with a collection agency.

New Debt Collection Laws

Debt collection laws vary by state and are subject to change at any time. While no new debt collection laws are scheduled to be introduced in 2023, it’s important to keep up with changes in your jurisdiction. The FTC is a good place to learn more about debt collection laws. If you have a lawyer, they’ll also be able to inform you if any state laws change.

What To Do if You’re Defending Yourself

If you’re planning to defend yourself in court, it’s crucial that you take steps to protect yourself and act proactively. Learn more about the steps to take to defend yourself against the lawsuit. Here are some key things to do:

  • Ensure you file your response to the Complaint in a timely manner.
  • Review affirmative defenses to see which one you can use for your case.
  • Make the collection agency prove that you owe the alleged amount in the Complaint.
  • Make the collection agency prove that they have the right to sue you legally.

“If you choose to forgo using an attorney and opt to defend yourself in court, it’s a good idea to learn the proper court procedures for presenting evidence and making objections in open court to avoid possibly undermining your own case,” suggests Brad Reichert, Founder, and Managing Director of Reichert Asset Management LLC.

“There is a very strict process that just about every court in the country follows when hearing cases and reviewing evidence. You don’t want to prejudice your own case by committing several procedural errors,” Reichert adds.

2. Find a Reputable Lawyer

The most important thing you can do to fight a debt collection lawsuit is to hire a good debt collection attorney. The right attorney will have the knowledge and experience of protecting the rights of consumers. They can help you determine the best way to defend yourself and alternatives for your situation. If you can’t afford attorney fees, you may be able to find pro bono attorneys in the American Bar Association directory and find local attorneys through the Legal Services Corporation.  

3. Create a Defense Strategy

To prepare your defense strategy, check to see if the collection agency has proof of debt. Review court papers to spot any inaccuracies or mistakes in the information, such as the amount of money you owe. Review your own records about the debt, such as:

  • Communication with the original lender.
  • Bank statements, evidence of payments, and credit card statements.
  • Account statements.
  • Correspondence with the collection agency, such as a debt validation letter.

Your defense should be able to point out any inaccurate information in their case and present evidence or documents to support it. Prepare an affirmative defense, which includes documents that support your defenses, such as:

  • You paid the debt.
  • The statute of limitations for the debt in question expired.
  • The court discharged your case in bankruptcy.

File a Motion to Dismiss

A Motion to Dismiss is a formal request to the court to dismiss a case without further consideration or debate. If you are getting sued by a debt collector but have evidence that supports you, you can file a Motion to Dismiss. In some cases, the debt collectors may dismiss their case voluntarily when they realize they can’t prove the claims. Remember that you can only do this if you have sufficient evidence for your claims. For example, if you have proof that you do not owe the debt or that the information on the debt is incorrect, you can submit the relevant documentation to prove it. You can also provide information backing up claims that the collection agency violated your rights.  

Get Your Lawsuit Dismissed

When you file a motion to get your lawsuit dismissed, it’s usually based on any procedural issues in the lawsuit, such as mentioning the wrong credit card company. If you notice any of these common reasons, you may be able to get your lawsuit dismissed:

  • The plaintiff named the wrong entity or person or didn’t name an essential entity in the lawsuit.
  • You were not served the lawsuit legally.
  • The location in the lawsuit is incorrect.
  • The court doesn’t have any jurisdiction over the case.
  • The statute of limitations on the debt has expired.

If you’re hoping to get your lawsuit dismissed, the best thing to do is to get legal advice. Most attorneys offer a free consultation. They can review the details of your case and discuss your options, including your chances of getting a dismissal.

4. Consider a Settlement

If you owe the debt in question and cannot file a Motion to Dismiss, your best bet is to settle the account. Even if you’re not able to pay the full amount you owe, an out-of-court debt settlement may be a good idea. If the debt collector accepts the settlement, they’ll drop the lawsuit.

This is an easier and cheaper way to get out of debt rather than deal with expensive lawsuits and spend thousands on legal assistance. In most cases, the debt collector will prefer this over an expensive lawsuit.

Can I Win a Debt Collection Lawsuit?

Your chances of winning a debt collection lawsuit will depend on a number of factors, such as your legal representation, defense strategy, and the strength of the evidence. The best way to improve your chances of winning the lawsuit is to know your rights and then follow some of these tips:

  • Respond to the lawsuit before the deadline.
  • See if you can use the statute of limitations as a defense.
  • Make the collection agency prove their case.
  • Deny as many debt claims as possible.
  • Add your affirmative defenses.
  • Negotiate a settlement.
  • File a Motion to Compel Arbitration when applicable to delay the process or avoid going to court.

The Bottom Line on Debt Collection Lawsuits

If you’re being sued by a debt collector, the most important thing to do is to respond to the lawsuit and follow the court order so there’s no default judgment. Next, consult an experienced attorney and work with them to come up with a strong defense strategy based on your financial situation. If you owe the debt in question, the best thing to do is to settle the debt out of court to avoid going to court. If you have other debts, talk to a credit counselor and explore debt relief options so you can avoid a debt lawsuit in the future.