Chloe Meltzer | October 19, 2022
Summary: Being sued for debt can be a scary situation. Find out how to answer a lawsuit for debt collection with SoloSuit.
If you have received any form of communication with a debt collector, you may feel overwhelmed and unsure where to turn. A lawsuit is the worst news you can get from any creditor. Yet, more than 70 million Americans are dealing with a debt collection lawsuit or have at one time.
Whether you have been served with a paper Summons to go to court or a debt collector is calling you, it is important to know how to answer a lawsuit for debt collection. If you know what to do after being served with a lawsuit, the entire process can go a lot more smoothly overall, and you have a better chance for a favorable outcome.
To win a debt lawsuit, you need to:
Here's what to do for each step.
The most crucial part of answering a lawsuit for debt collection is to file your Answer in court on time. If you do not respond to the notice in a timely fashion, you run the risk of a default judgment.
Even if you know that you owe the debt but think you cannot pay it, you still need to answer. Suppose the collection agency obtains a default judgment against you. In that case, this provides them the opportunity to garnish your wages or even take money directly from your bank account.
If a default judgment occurs, a debt collector may also be able to force you to pay attorney's fees, the court costs, and added interest on your entire balance. These additional charges can either double or triple the cost of your original lawsuit.
In a debt lawsuit, the collection agency is called the plaintiff, and you are the defendant. Once the lawsuit is filed and put before the court, you will not be able to respond by phone or a letter. Instead, you need to file a written, legal Answer. Here are 6 tips for drafting an Answer that will help you win your case:
Once you've completed these steps, make sure to file the official Answer with the clerk of court and send a copy to the plaintiff. You should make two copies of the answer, one to mail to the court and the other to the creditor suing you. Use certified mail so that you are notified when both parties receive their mail. For more information, watch this video.
You must file the answer within the period. This period is always set by the lawsuit summons and is often anywhere from 14 to 30 days from the date of the notice. Don't miss the deadline, or it will lead to a default judgment. Essentially, missing the deadline is the same as not responding. Additionally, after a judgment is entered, you will no longer be able to dispute the debt from then on.
The answer you file may vary depending on your state of residence. SoloSuit has a guide for filing an answer by state.
One of the best ways to respond to a debt lawsuit is to challenge the right to sue by the person that has filed the lawsuit. Although not as common with original creditors, typically, by the time debt gets into the hands of a debt collector, it will have been passed through many hands. There's a chance the original information regarding the debt will have been lost.
Use the state of events to your advantage. Make the company that has purchased the debt prove that they have accurate information regarding the debt and have the right to sue you. You can only get the opportunity to challenge the plaintiff if you respond to the lawsuit. Otherwise, the judge will automatically give you a default judgment. Even if there is no proof that you owe the debt, the judgment won't go to seek this information. The court will always see your silence as an acceptance of the debt.
If you ask for documentation in writing, or if you show up at the hearing and ask for documentation, the judge will most likely award your request.
The plaintiff (debt collector), when asked, must provide:
The burden of proof is a legal requirement to prove the following:
When you are served with a debt lawsuit, you have the opportunity to push back on this burden of proof. Not only can you require proof of the amount you owe, but you can also continue to push for proof of how you owe it. Can they substantiate when and how the balance increased at different times? Whether fees increased the amount, and why is it accurate? If not, they probably don't have a strong case against you.
The statutes of limitations are a law that governs how long creditors are legally allowed to bring a lawsuit to the court regarding debt. The statute of limitations is different in every state but often falls between four to six years. After the statute is over, your debt will then be time-barred. Although the creditor can pursue you for the debt, they cannot legally take you to court.
EXAMPLE: To illustrate, Paul, applied for a credit card in May 2002. In the beginning, he was on top of his repayments. However, Paul fell into hard times. He became seriously ill and eventually lost his job. The last time he made payments for his account was in October 2007. The creditor has sold his debt to a third-party debt collector who is aggressively pressuring him to pay. In this case, the debt collector cannot legally sue Paul for paying to pay. The debt has “expired.” Although they can still ask him to pay, they can't legally take him to court.
Know that the statute of limitations starts on the last day you were active on the account. So, the last time you used a credit card or drew funds from a loan account will restart the clock on the statute of limitations. Once a debt collection lawsuit has begun, you must avoid paying on the debt, as this, too, will reset the date.
If the debt collector has overstepped your rights, as expressed in the Fair Debt Collection Practice Act (FDCPA), you can also sue them as you answer their lawsuit. Most consumer attorneys will take your case for free if they see the potential. If you win, the court can award you up to $1000 per violation and your attorney's fee. So, a debt collector who's violated the debt collection laws may pay much more than they are suing you for.
Whatever decision you decide to make about defending your debt, you must send an Answer to the debt lawsuit you have been served with. Your financial history continues to grow and develop your entire life. If you allow debt to get out of hand, this can impact your credit score and prevent you from making other financial moves in your life. Always respond to a debt lawsuit and look for a way to settle it as soon as possible.
Finally, a great option for responding to a debt lawsuit is to reach out to the debt collector or creditor about negotiating a debt settlement.
If you're being sued by the original creditor, there is a great chance they will settle for 20%-70% of the debt. On the other hand, most debt collectors (or debt buyers) will settle for anywhere between 1%-6-% of the debt.
To learn about how to negotiate a settlement offer in 3 simple steps, check out the video below:
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now or are just looking for support, we're here for you.
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.