If you've been served, find the response deadline on the summons today. Depending on your state and court, it's often somewhere between 14 and 30 days from the day you were served. If you don't file a response in time, the court will usually enter a default judgment against you. That's what opens the door to wage garnishment, frozen bank accounts and liens.
What to do in the first week
- Read the summons and complaint carefully. Write down the court name, the case number, the response deadline, and who is suing you. It may be the original creditor or a debt buyer you've never heard of.
- Make sure it's real. Fake lawsuit threats are a common scam. Look up the court's phone number yourself (don't use the one on the papers) and ask the clerk to confirm the case number.
- File a written response, usually called an "answer," by the deadline. Many courts have fill-in-the-blank answer forms and free self-help centers that will walk you through it. File it with the court and send a copy to the other side's lawyer, the way the court's instructions say.
- Raise every defense that applies (see the list below). If you don't raise a defense in your answer, you may lose the chance to use it later.
- Go to every hearing. Debt buyers often can't produce the paperwork to prove their case, and some cases get dismissed simply because the person sued showed up.
- Get free legal help if you can. Even one consultation helps. See the resources below.
Common defenses in debt lawsuits
- It isn't your debt, or it came from identity theft.
- The amount is wrong: added fees, interest you never agreed to, or payments that weren't credited.
- You already paid it, settled it, or it was discharged in bankruptcy.
- The statute of limitations has run out. Every state sets a time limit for suing on a debt, often 3 to 6 years depending on the state and the type of debt. Federal rules bar debt collectors from suing, or threatening to sue, on a debt that's past that limit.
- The plaintiff can't prove it owns the debt. When a debt has been sold, sometimes more than once, the buyer has to show the chain of ownership.
- You weren't properly served.
Not sure which apply? That's exactly what a legal aid office or consumer attorney can sort out quickly.
Settling after you've been sued
Being sued doesn't take settlement off the table. Plenty of plaintiffs would rather settle than go to trial. If you reach a deal, get it in writing, make sure it says how the case will be dismissed or resolved with the court, and keep proof of every payment. Don't stop participating in the case until it's officially closed.
If there's already a judgment against you
How much of your pay can be garnished
For ordinary consumer debts like credit cards, medical bills and personal loans, federal law (Title III of the Consumer Credit Protection Act) caps wage garnishment at the lesser of:
- 25% of your disposable earnings (what's left after legally required deductions like taxes), or
- the amount your weekly disposable earnings exceed 30 times the federal minimum wage. At $7.25 an hour, that protects the first $217.50 a week.
Many states protect more of your pay than that, and some protect certain workers or low incomes entirely. Child support, taxes and federal student loans follow different rules.
Money that's generally protected
Social Security, SSI, VA benefits, and federal retirement and disability benefits generally can't be taken by private creditors to pay a regular consumer debt. If those benefits are direct-deposited, federal rules require your bank to automatically protect up to two months' worth of them when it receives a garnishment order. Many states also protect things like unemployment benefits, some retirement accounts, and a certain amount in a bank account.
Things you can still do
- Claim exemptions. Courts let you claim that certain income or property is exempt. The deadlines for this are short, so read every notice you get right away.
- Ask to set aside a default judgment if you were never properly served or had a good reason for missing the deadline. Act quickly.
- Negotiate with the creditor. A judgment creditor may still accept a payment plan or lump-sum settlement.
- Talk to a bankruptcy attorney. Filing for bankruptcy triggers an "automatic stay" that stops most garnishments and collection lawsuits right away. Many bankruptcy attorneys offer a free first consultation. See how bankruptcy compares with the other options.
Free and low-cost legal help
- Legal aid: find a federally funded legal aid office near you through the Legal Services Corporation, or search LawHelp.org.
- Your court's self-help center: most state court websites have answer forms and step-by-step guides for debt cases.
- Consumer attorneys: the National Association of Consumer Advocates lists attorneys who handle debt collection cases. If a collector broke the law, the law can make the collector pay your attorney's fees.
- State bar lawyer referral services often offer low-cost first consultations.
Also dealing with collector calls? Your rights and free dispute letters are on our collectors page.
Sources
- U.S. Department of Labor, Fact Sheet #30: Wage Garnishment Protections of the CCPA
- CFPB, Can a debt collector take my federal benefits?
- CFPB, Debt collection consumer tools (including what to do if you're sued)
- Regulation F, 12 CFR 1006.26 (collection of time-barred debts)
This page is general information, not legal advice. Court rules and deadlines vary by state, so follow the instructions on your own court papers.