Help! I'm Being Sued by My Debt Collector

George Simons | February 01, 2025

Fact-checked by Patrick Austin, J.D.

Patrick Austin
Attorney from George Mason
Patrick Austin, JD

Patrick Austin is a licensed attorney with a background in data privacy and information security law. Patrick received his law degree at George Mason University's Antonin Scalia Law School, where he served as the Editor-in-Chief for the National Security Law Journal.

George Simons
Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Being sued by a debt collector can stress you out. You might not know what to do. Should you ignore them? Should you pay? Find out what to do when you're served with a debt collection lawsuit and learn the steps you can take to resolve your debt issue.

If you are a few months past due on your credit card or haven't paid off a loan for a while, your creditor may decide to assign or sell the debt to a third-party debt collection agency. In this case, the debt collector will then attempt to collect the debt. If you continue to ignore the requests of the debt collector to collect this debt, you may find yourself being sued.

If you receive a summons for a debt lawsuit, then you may be confused about what to do next. The most important thing to do is respond. Follow the guidelines outlined below to ensure you make the right move if you are being sued by a debt collector. For example, the information below contains tips and guidance on how to negotiate a debt settlement where you could wind up paying less than the amount owed.

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What happens when you’re sued by a debt collector?

If you're being sued by a debt collector, you must understand exactly the timeline of the events you will be going through. Although this might be different from case to case, generally the steps outlined below will be what you will experience.

  1. You receive a phone call or letter in the mail: This will be from the debt collector notifying you of the debt collection. Expect this to occur when a debt is at least 180 days past due.
  2. Debt collector sends debt validation letter: The debt collector must send this within five days of contacting you. This should include how much you owe, the name of the creditor, as well as advice on how to dispute the debt if you believe it's not yours.
  3. If you do not think you owe the debt: You must ask the debt collector for a verification letter. They must send this letter within 30 days of the validation notice.
  4. If you know you owe the debt: If your debt is legitimate, then you must respond to the debt collector. You should create a plan and negotiate. This might include paying off the debt in full, setting up a payment plan, or negotiating the debt.
  5. If you do not work to pay or settle the debt: The debt collector will then sue you. You will receive a notice from the court letting you know when to appear.
  6. Failure to show up in court: If you fail to show up in court then you will receive a default judgment. This means that the judge will rule in favor of the debt collector.
  7. Wage garnishment: Default judgments come with consequences. This leads to wage garnishment, liens placed on your property, or a frozen bank account.

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Here’s what to do when you're sued by a debt collector

1. Respond to the debt collection lawsuit

As long as you have verified the legitimacy of the debt, then you must respond to the debt collection lawsuit. This might be something you want to avoid, and ignoring it may seem like a good option. Ignoring is not a good option at all. It's the worst option. Just because you do not respond does not mean that the collector will drop the lawsuit. Instead, it will cause you to miss deadlines and make it more difficult to fight your debt later on.

2. Challenge the debt collector

Debt collectors are typically third-party agencies. Whether your debt collector was hired by the original creditor after you defaulted, or they purchased your debt, the debt has changed hands more than once.

You may want to challenge the lawsuit if:

  • You believe you are the wrong person being sued
  • You have already paid off the debt
  • The debt amount is wrong
  • The statute of limitations has passed

The statute of limitations is the amount of time that a debt collector can legally collect a debt. It ranges from three years up to 20 years depending on where you live and the type of debt you owe.

3. Get validation of the debt

If you're being sued for debt and you disagree with any of the information given to you in the lawsuit, you may want to file a response. This means you will need to ask for validation of the debt. If they cannot prove the debt, where the debt originally came from, how much you owe, and that it is you who owes the debt.

4. Bring evidence of FDCPA violations

If your rights have been violated by a debt collector, then you need to bring evidence of this to your trial. As a consumer, you are protected by the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act, and the Truth in Lending Act for specific violations.

Under the FDCPA, debt collectors may not:

  • Contact you at odd hours such as outside the hours of 8 am and 9 pm.
  • Harass you such as using profanity or threatening you harm.
  • Partake in unfair practices. This might include threatening to take your property (although they have no legal right to do so) or depositing a post-dated check early.
  • Contact you after you have a lawyer.
  • Lie, such as telling you they are someone else, or that you owe a different amount.

5. Decide if you want to accept the judgment.

There are many ways you can proceed when it comes to accepting a debt collection lawsuit. If you decide to accept the judgment but do not want to go to court then you will probably want to negotiate out of court.

If you have limited wages and assets then you may actually be judgment proof. This means that your wages cannot be garnished. Additionally, if your debt is so high that you cannot manage it, your final choice is to file for bankruptcy.

6. Negotiate to settle your debt

If your debt is legitimate, then you may be able to have your lawsuit dropped by negotiating a settlement. This is a good option if you know that the debt is yours, and you can afford to pay some of it. This will allow you to avoid going to court altogether.

Prior to commencing settlement negotiations with the debt collector, assess the amount you can actually afford to pay toward the debt, preferably in a lump sum (this is often the settlement structure that debt collectors prefer). Your calculation should take into consideration your living expenses.

Once you’ve calculated how much you can reasonably repay, then you can reach out to the debt collector. Begin the negotiations by offering a lower percentage of the total debt, anywhere between 30% and 50% of the original amount. You should be prepared to negotiate upward in the event the debt collector declines to accept your initial offer.

If negotiations go well, make sure to memorialize the settlement in a written agreement. This is commonly referred to as a debt settlement agreement. The agreement should state that the payment will settle the debt in full and that they will not pursue any further legal action or collections.

To learn more about these steps, watch our video guide below:

If you decide to engage in settlement talks, consider using smart tools to help you with the debt settlement negotiation process, like SoloSettle. For context, SoloSettle can help you begin the settlement negotiation process online when you are sued for a debt you owe.

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