What to Do If You Are Sued Over Credit Card Debt

If you’ve been served with a lawsuit over credit card debt, the most important thing is the deadline to respond, which is printed in the papers. Respond by that date even if you think you don’t owe the money or the debt is too old. People who don’t respond usually lose automatically by default judgment, and that can lead to wage garnishment or a frozen bank account.

Confirm it’s real

Debt lawsuits are common, but so are scams that imitate them. Real court papers name a specific court and include a case number. Look up the court’s phone number or website yourself (not from the papers) and confirm the case exists. A threatening phone call, text, or email is not a lawsuit.

Then find:

• the name of the court and the case number
• who is suing you (the plaintiff); it’s often a debt buyer rather than your original card company
• the amount they’re asking for
• the deadline and how you have to respond: a written answer, a court appearance, or both

Keep every page, and the envelope.

Respond by the deadline

Deadlines depend on your state and the court, and they can be short. If you aren’t sure what’s required, call the court clerk. Clerks can’t give legal advice, but they can explain how to file an answer and whether there’s a form to use. Many courts have self-help centers with free answer forms for debt cases.

Responding doesn’t mean you’re admitting anything. It means you get to tell your side and make the plaintiff prove its case.

Look for problems with the claim

Compare the lawsuit with your own statements and records. Common issues include:

• The wrong person, or a debt that’s already paid
• The wrong amount, sometimes padded with fees or interest
• Missing paperwork. Debt buyers sometimes can’t produce the original agreement or a clear chain showing they own the debt.
• An expired statute of limitations. If the debt is too old, that can be a complete defense, but usually only if you raise it in your answer. See Can a Collector Pursue Old Credit Card Debt?

Sending a debt validation letter is not a response to a lawsuit. You still have to answer the court. How to Respond to a Debt Validation Notice covers that separate process.

Get help, even briefly

Legal aid organizations handle a lot of consumer debt cases and are free if you qualify by income; the Legal Services Corporation has a search tool for finding one near you. Some consumer attorneys offer low-cost consultations. Even 30 minutes with someone who knows the local court can tell you whether you have a defense worth raising and what a reasonable settlement looks like.

Bring the summons and complaint, your card statements, payment records, and any letters from collectors.

If you settle

Many debt lawsuits end in a settlement. If you negotiate one, get it in writing before paying, and make sure it says how the case will end: dismissed, or with a judgment entered against you. That difference matters for your credit and for what happens if you miss a payment later. Keep meeting court deadlines until the court confirms the case is closed.

If there’s already a judgment

If you missed the deadline and a default judgment was entered, contact legal aid quickly. Courts sometimes allow a motion to set aside a default, especially if you weren’t properly served, but there are time limits.

Federal law caps wage garnishment for ordinary debts, generally at 25% of your disposable earnings, and some states protect more. Certain income, such as Social Security benefits, is generally protected from garnishment by private creditors. What Happens After a Missed Credit Card Payment? explains how accounts usually reach this point, if you’re trying to prevent the next one.

Sources

• FTC: What to do if a debt collector sues you
• Department of Labor: Wage garnishment protections (Fact Sheet #30)
• Legal Services Corporation: Find legal aid

This article is for educational purposes and is not financial advice.