What Happens if You Get Sued by a Debt Collector?

Debt collectors may use a wide range of tactics to get you to pay up, including filing a lawsuit against you. If the debt collector wins, you may be responsible for paying attorney costs and court fees as well as the debt itself. If you're sued by a debt collector, understanding how the process works and what your rights are can help you prepare your defense.

Answering the Summons

When a debt collector sues, it is required to notify you of the court date in the form of a judicial summons. You must answer the summons and return it to the court within the time frame specified by state law. When you file your answer, you must provide a reason or defense as to why you believe you are not responsible for the debt. For example, you may have a defense if you believe the debt is past the statute of limitations for collection actions. If you have documentation or other evidence to support your defense, you must bring it to court on the scheduled date.

Judgment and Execution

If the debt collector successfully proves that you are liable for the debt, the court will issue a judgment in its favor. Once the judgment is issued, the collection agency can then pursue wage garnishment or attachment of your bank account to collect what you owe. To garnish your wages or bank account, your creditor must file a writ of garnishment with the court. Both individual and joint bank accounts are subject to seizure. As of the date of publication, wage garnishment for debts is not allowed in Texas, North Carolina, Pennsylvania or South Carolina.

Claiming Exemptions

If your creditor attempts to attach your bank account, you must file a claim of exemption with the court if you have exempt deposits. Under federal law, Social Security benefits, Supplemental Security Income, veterans' benefits, military survivors' benefits, FEMA disaster relief, student assistance, foreign service retirement and disability benefits, railroad workers' compensation and merchant seamans' wages are exempt from garnishment for debt collection lawsuits. Depending on the laws in your state, you may also be able to claim an exemption for workers' compensation payments, unemployment benefits, child support or alimony payments.

Considerations

Failure to respond to a summons in a debt collection lawsuit may result in a summary judgment being entered against you. You can file a motion to vacate a summary judgment if you were never properly notified of the court date. If a creditor sues, you can attempt to resolve the case without going to court by contacting it directly to offer a settlement or work out a payment plan. If you owe the debt but have no means to repay it, filing bankruptcy forces your creditors to cease all collection actions against you until your petition is either dismissed or discharged.