What to Do If a Credit Card Company Sues You

Many people believe that if a credit card company sues you, you've already lost. This is a dangerous myth. The truth is, the burden of proof is entirely on them. They must prove to a court that the debt is yours, the amount is correct, and they have the legal right to collect it—and often, they can't. This guide will show you how to challenge their claims and stand up for your rights. We will cover common defenses that can get a case dismissed and explain how to formally respond to the lawsuit to protect yourself from an automatic loss.

Key Takeaways

• Act Immediately to Protect Yourself: The single most important step is to file a formal "Answer" before your court deadline. Ignoring the lawsuit guarantees an automatic loss, giving the collector the power to garnish your wages or take money from your bank account.
• Make the Collector Do Their Job: You have the right to force the company suing you to prove every part of their claim. By responding, you can challenge whether the debt is too old, if they have the right to sue, or if the amount is even correct. The burden of proof is on them, not you.
• Affordable Help is Available: You don't have to choose between the high cost of a lawyer and the stress of handling everything alone. Services exist to help you prepare and file the correct legal documents confidently, giving you a powerful way to defend yourself without breaking the bank.

Sued by a Credit Card Company? Here’s What to Do First

Receiving a lawsuit is stressful, but ignoring it is the worst thing you can do. Taking calm, deliberate action right away is the best way to protect yourself and your rights. Let’s walk through the first three things you must do after receiving court papers. These initial steps will give you back a sense of control and set you up for a much better outcome.

Read Every Document

First, take a deep breath and carefully read everything you were given. The main documents are likely a Summons and a Complaint. The Summons is the official court notice that you’ve been sued, while the Complaint explains why the credit card company is suing you. Look for key information: who is suing you, the court where the case was filed, and the specific amount they claim you owe. It’s important to understand the claims and allegations so you know exactly what you need to respond to.

Find Your Response Deadline

This is the most critical piece of information in the packet. The Summons will tell you how long you have to file a formal response with the court, and this deadline is non-negotiable. The exact timeframe varies by state but is often between 14 and 30 days from when you received the papers. Missing this deadline can lead to a default judgment, meaning the court can automatically rule against you without you ever getting a chance to tell your side of the story. Mark this date on your calendar immediately.

Gather Your Records

Now, start collecting any paperwork you have related to the debt. Look for old credit card statements, letters from the debt collector, and any records of payments you’ve made. According to the Federal Trade Commission, checking your own records is a key step in preparing your defense. These documents can help you verify the amount they claim you owe and confirm whether the company suing you actually has the right to collect the debt. If you don't have many records, don't worry—the burden is on them to prove their case.

What Happens if You Ignore the Lawsuit?

When you’re staring at a thick envelope of legal documents, it’s tempting to toss it aside and hope the problem disappears. But when it comes to a lawsuit, ignoring it is the single worst thing you can do. Each year, millions of Americans are sued for debt, and a staggering 70-90% of them lose automatically simply because they never respond.

Failing to act gives the credit card company an easy win. The court assumes you agree with their claim because you didn’t show up to defend yourself. This leads to a series of consequences that are far more stressful and damaging than facing the lawsuit head-on. From having your wages taken to long-term credit damage, the fallout can affect your financial life for years. Let’s break down exactly what happens when you don’t respond.

The Risk of a Default Judgment

If you don’t file a formal response with the court by your deadline, the company suing you can ask the judge for a default judgment. Think of it as forfeiting a game—because you didn’t show up to play, the other team automatically wins. The court will likely grant their request without ever hearing your side of the story.

A default judgment is a legally binding court order stating that you owe the debt. It gives the creditor powerful legal tools to collect the money from you, whether you actually owe it or not. Once a judgment is entered, your options become much more limited and expensive.

How Wage Garnishment Works

With a default judgment in hand, a creditor can start taking money directly from you. One of the most common methods is wage garnishment. This is a court order sent to your employer, requiring them to withhold a certain amount of money from your paycheck and send it directly to the creditor. This continues until the debt, plus any interest and legal fees, is paid in full.

The creditor can also go after your bank account through a bank levy, freezing your funds and taking money out to satisfy the judgment. While certain funds like Social Security are typically protected from garnishment, a levy can still cause major disruptions to your finances and daily life.

The Impact on Your Credit

A default judgment doesn’t just affect your wallet—it deals a heavy blow to your credit report. Judgments can remain on your credit history for years, acting as a major red flag to future lenders, landlords, and even employers. It signals that you failed to handle a legal financial obligation, which can make it incredibly difficult to get approved for a car loan, a mortgage, or even a new apartment.

This negative mark can significantly lower your credit score, leading to higher interest rates on any credit you do manage to get. While settling a debt can also impact your credit, a judgment is far more damaging and has longer-lasting consequences.

Know Your Rights in a Debt Lawsuit

Receiving a lawsuit summons can feel like a final verdict, but it’s not. It’s the start of a legal process, and you have significant rights every step of the way. Understanding these rights is the first step toward taking control of the situation. Federal and state laws exist specifically to protect you from unfair practices and to ensure the debt collector plays by the rules. Don't assume you're powerless just because you've been sued. You have options and protections you can use to defend yourself effectively.

Your Protections Under the FDCPA

You’re not alone in this process. A powerful federal law called the Fair Debt Collection Practices Act (FDCPA) sets strict rules for what debt collectors can and cannot do. For example, they can't harass you, lie about the amount you owe, or use deceptive methods to collect a debt. They are also limited in when and how they can contact you. Many states have their own consumer protection laws that provide even more safeguards. Knowing these rules is your first line of defense. If a collector has violated the FDCPA, it could become a key part of your legal strategy and even give you grounds to countersue.

Your Right to Dispute the Debt

One of the most important rights you have is the right to make the debt collector prove their case. When you formally respond to the lawsuit, you aren't just saying "I don't owe this." You are legally requiring the company to provide evidence that the debt is yours, the amount is accurate, and they have the legal standing to sue you for it. This process is called debt validation, and you can start it by sending a formal debt validation letter. Filing an Answer in court puts the burden of proof squarely on them. It forces them to do their homework, and sometimes, they can't.

Your Right to Get Legal Help

You don't have to face a lawsuit by yourself. You always have the right to seek legal help, and it's wise to consider it. A lawyer who specializes in consumer law can review your case, explain your defenses, and represent you in court. Even a brief consultation can clarify your options. If you decide to hire an attorney, resources like the American Bar Association's directory can help you find qualified professionals in your area. While hiring a lawyer is a great option, we know it isn't always financially feasible. That’s why accessible alternatives exist to help you prepare and file the necessary legal documents correctly and confidently, without the high cost of traditional representation.

Common Defenses Against a Credit Card Lawsuit

When a debt collector sues you, it can feel like they hold all the cards. But that’s rarely the case. The legal system requires the company suing you—the plaintiff—to prove their case. By filing a formal Answer to the lawsuit, you get the opportunity to present defenses that challenge their claims.

An affirmative defense is a reason why the plaintiff shouldn’t win, even if the facts in their complaint are true. You don’t have to be a legal expert to use them. Many common defenses are based on simple facts: the debt is too old, the company can’t prove they own it, or the information is just plain wrong. Raising these issues forces the collector to do their homework and provide actual evidence, which they often don't have. This is your chance to stand up for your rights and ensure the lawsuit is legitimate.

Is the Debt Too Old to Collect?

Every state has a law called the statute of limitations, which sets a firm deadline for how long a creditor can wait to sue you over a debt. This time limit usually starts from your last payment and varies significantly by state, typically ranging from three to ten years. If a debt collector files a lawsuit after this period has expired, the debt is considered "time-barred."

You can still be contacted about a time-barred debt, but you can’t lose a lawsuit over it. It’s one of the strongest defenses you can have. However, a judge won’t check this for you automatically—you have to raise it as a defense in your official Answer. You can learn more about the specific statute of limitations in your state to see if this defense applies to your case.

Do They Have the Right to Sue?

The company suing you might not be your original credit card company. Debts are frequently bought and sold, sometimes multiple times. The plaintiff, whether it's the original creditor or a third-party debt buyer, must prove they have the legal right—or "standing"—to sue you. This means they need to provide clear documentation showing the chain of ownership from the original creditor directly to them.

It’s their job to prove everything. When you file your Answer, you make the collector show the court that they are the correct party to file the lawsuit. Many debt buyers purchase debts with incomplete records and hope you won't challenge their right to sue. Don't let them get away with it. The Federal Trade Commission (FTC) confirms that the burden of proof is entirely on the collector.

Can They Prove You Owe the Debt?

Beyond proving they have the right to sue, the debt collector must also prove that you actually owe the specific debt mentioned in the lawsuit. Responding to the lawsuit officially requires them to produce the evidence they have against you. This isn't just a bill with your name on it; it should include the original signed contract and a complete history of the account to justify the amount they claim you owe.

Many debt collection lawsuits are filed without this essential paperwork. The business model often relies on the fact that most people don't respond, leading to an automatic win for the collector. By filing an Answer, you force them to back up their claims with facts. A great first step, even before a lawsuit, is to request debt validation to make the collector verify the debt in writing.

Is the Amount or Identity Wrong?

Mistakes happen all the time in debt collection. The lawsuit filed against you could be full of errors, and it’s your right to point them out. First, check the amount. Is it correct? Debt collectors often add interest and fees that may be miscalculated or not allowed under the original agreement. If the amount seems wrong, you should dispute it.

Second, confirm you are the right person. If you have a common name, it’s possible they are suing the wrong individual. The debt could also be the result of identity theft. You should tell the court if you believe the debt amount is wrong or if you're not the person who owes the money. Never agree to claims you aren't 100% sure about, as it can make it harder to defend yourself later.

How to Respond to a Credit Card Lawsuit

When you’re served with a lawsuit, your first instinct might be to panic. But taking a deep breath and creating a plan is your most powerful move. Responding to the lawsuit is not just about defending yourself; it’s about taking control of the situation. You have options, and the process generally involves three key steps: formally answering the complaint, making the debt collector prove their case, and looking into a potential settlement. Each step gives you an opportunity to protect your rights and work toward the best possible outcome for your situation. Let’s walk through what each of these actions involves.

File a Formal Answer

Ignoring a lawsuit is the one thing you should never do. The first and most critical step is to file a formal response with the court, known as an "Answer." This document is your official reply to the credit card company's claims. As the Federal Trade Commission (FTC) advises, you should respond even if you don’t believe you owe the money. You typically have a strict deadline, often between 14 and 30 days, to file your Answer. If you miss it, the court can issue a default judgment against you, allowing the collector to win automatically and potentially garnish your wages or seize funds from your bank account. LawLaw can help you prepare the right Answer for your lawsuit to ensure you meet your deadline and properly assert your defenses.

Request Debt Validation

When you file your Answer, you also put the ball back in the collector’s court. Your response forces them to prove that you actually owe the debt, that the amount is accurate, and that they legally have the right to sue you for it. This process is called debt validation. You have the right to ask for documentation, like a detailed list of the original charges that make up the total amount they claim you owe. This is a crucial step because debt collectors sometimes have incomplete or inaccurate records, especially if the debt has been sold multiple times. You can formally request proof of the debt to challenge their claims and identify any potential errors that could help your case.

Explore Settlement Options

Responding to the lawsuit doesn’t automatically mean you’re headed for a long, drawn-out court battle. In many cases, exploring a settlement is a smart and practical strategy. A settlement is an agreement you reach with the credit card company to resolve the debt outside of court, often for less than the full amount they are suing you for. This can save you the time, stress, and uncertainty of a trial. Even if you have a strong defense, settling can provide a guaranteed resolution. You can start negotiations at any point after the lawsuit is filed. The goal is to reach a lump-sum or payment plan agreement that you can afford and that officially closes the case against you.

Should You Hire a Lawyer or Represent Yourself?

Deciding whether to hire an attorney or handle the lawsuit yourself is a major choice, and there’s no single right answer. Your decision will likely come down to the complexity of your case, your comfort level with the legal process, and your budget. Both paths have their own advantages, so it’s important to understand what each one involves before you commit. Let's walk through the options so you can make an informed choice that feels right for you.

The Benefits of Hiring a Professional

Having a legal expert in your corner can make a significant difference. Studies show that people who hire a lawyer for debt collection lawsuits often achieve better outcomes. An attorney who specializes in consumer law can analyze your case for weaknesses, handle all communication with the debt collector’s lawyers, and represent you in court. They understand the rules and procedures, which can take a huge amount of stress off your shoulders. If you can afford legal help, you can find a qualified lawyer in your area who has experience with the Fair Debt Collection Practices Act (FDCPA).

When Representing Yourself Makes Sense

For many people, the cost of hiring a lawyer is a major barrier. The good news is that you absolutely have the right to represent yourself in court, which is known as appearing pro se. The most critical thing is that you take action. Ignoring the lawsuit is not an option, as it will lead to a default judgment against you. If you choose to handle the case yourself, your first step is to file a formal "Answer" with the court before the deadline. This is your opportunity to officially respond to the collector’s claims and present your defenses.

Understanding the Costs and Alternatives

If a private attorney isn't financially feasible, you still have options. You can look for local legal aid organizations that offer free or low-cost services to those who qualify. For people who want to represent themselves but need guidance, there are also more affordable tools available. LawLaw was created to bridge this gap. We provide the tools to help you prepare and file your official Answer correctly and confidently, without the high cost of an attorney. This approach gives you control over your case while ensuring you follow the proper legal steps to protect your rights.

4 Common Myths That Can Hurt Your Case

When you're facing a lawsuit, misinformation can be just as damaging as the lawsuit itself. It’s easy to fall for common myths, especially when you’re feeling stressed and unsure of what to do next. Believing the wrong thing can lead you to make critical mistakes, like missing your deadline to respond. Let’s clear up a few of the most dangerous misconceptions about debt lawsuits so you can move forward with confidence and protect your rights.

Myth #1: Ignoring the lawsuit makes it go away.

This myth is probably the most dangerous one out there. It’s tempting to hope that if you just ignore the stack of papers, the problem will solve itself. Unfortunately, the opposite is true. When you don't respond to a lawsuit, you give up your right to defend yourself. The court will likely issue a default judgment against you, which means the debt collector automatically wins. The Consumer Financial Protection Bureau explains that a judgment gives the collector powerful tools to collect the debt, like garnishing your wages or freezing your bank account. Taking action is your only real option.

Myth #2: You can't challenge the debt.

Many people assume that if a company is suing them, the debt must be valid. This isn't always the case. You have a legal right to challenge the debt, and it's often a smart move. Filing a response forces the debt collector to prove their case in court. According to the Federal Trade Commission, the collector must prove that you actually owe the money, that the amount is correct, and that they have the legal standing to sue you. Sometimes they can't produce the necessary paperwork, which can get the case dismissed. Don't assume their claim is airtight.

Myth #3: You have no power in court.

Facing a lawsuit from a big company can feel like a David vs. Goliath situation, leaving you feeling completely powerless. But that’s simply not true. The legal system has specific rules and procedures that everyone—including debt collectors—must follow. Even if you know you owe the money, you still have rights. By responding to the lawsuit, you are actively participating in the process and holding the collector accountable. You can defend yourself in court by raising defenses, questioning the evidence, and ensuring your rights are protected every step of the way. You have more power than you think, but you have to use it.

Myth #4: Settling will ruin your credit.

Worries about your credit score are valid, but letting that fear dictate your legal strategy can backfire. While settling a debt for less than the full amount can appear on your credit report, it's often a much better outcome than losing the lawsuit. A default judgment is a public record that can seriously damage your credit for years, making it harder to get loans or even rent an apartment. Settling the debt allows you to resolve the issue on your own terms, avoid further legal action, and begin rebuilding your financial health sooner. It's about choosing the best available option to mitigate the damage.

How to Prepare if Your Case Goes to Court

The thought of going to court can be nerve-wracking, but preparation is your best tool for feeling confident and in control. While most debt collection lawsuits don’t end in a full-blown trial, being ready for that possibility puts you in a much stronger position to negotiate or defend yourself. It shows the other side you’re taking this seriously and won't be pushed around.

Think of it less like a TV drama and more like a formal meeting where rules and facts matter most. Your job is to present your side of the story clearly and calmly, backed by whatever evidence you have. Focusing on a few key areas—your evidence, the court’s rules, and what you plan to say—can make all the difference. Let’s break down how to get ready.

Organize Your Evidence

The good news is that in a debt lawsuit, the burden of proof is on the credit card company or debt collector. They have to prove that you are the right person, that the amount they’re claiming is accurate, and that they have the legal right to sue you for it. Your job is to gather any documents that challenge their claims or support your defense.

Start a dedicated folder for everything related to the case. Collect any letters you’ve received from the collector, old credit card statements, proof of payments you’ve made, and any notes from phone calls. If you believe the debt is too old or doesn’t belong to you, find any records that support that. Having everything in one place makes it easy to build your case and find what you need quickly.

Understand Court Rules and Etiquette

Every court has its own set of procedures, and following them is non-negotiable. The most important rule is to meet every deadline. Your initial summons will tell you how long you have to file your official Answer—missing this deadline can lead to an automatic loss through a default judgment, which is exactly what the debt collector is hoping for.

Beyond deadlines, basic courtroom etiquette shows respect for the process. If you have a hearing, plan to arrive early. Dress professionally, as if you were going to a job interview. When you speak to the judge, address them as "Your Honor." Avoid interrupting anyone, and always be polite, even if you disagree with what the other party is saying. Following these simple rules helps ensure the proceedings go smoothly and that you are taken seriously.

Practice What You'll Say

You don’t need to memorize a script, but you should have a clear idea of the key points you want to make. Start by reviewing your Answer to the lawsuit. This document outlines your official defenses, so be prepared to speak about them. Write down the main facts of your case in a simple, chronological order.

Focus on being clear and concise. Stick to the facts and avoid getting emotional. If you plan to negotiate a settlement, think about what you can realistically offer and what outcome you’d be happy with. Practicing your points beforehand, even just saying them out loud to yourself, can help you feel much more comfortable and articulate if you have to speak in front of a judge or with the opposing attorney.

How LawLaw Makes Responding Easy

Facing a lawsuit is overwhelming, but you don’t have to go through it alone. The legal system has its own language and a strict set of rules that can feel impossible to follow. That’s why we created LawLaw—to make responding to a debt lawsuit easy, simple, and affordable. We believe everyone deserves to protect their rights, regardless of their ability to hire an expensive attorney.

Our platform is designed to give you the tools and confidence you need to stand up to debt collectors. We break down the process into simple, manageable steps, so you can focus on what matters most: getting a fair outcome. Instead of spending hours trying to figure out legal paperwork and court procedures, you can generate your response documents and get them filed in minutes. We handle the complicated parts so you can move forward with peace of mind.

Get Attorney-Reviewed Documents

Hiring a lawyer can be a great move when you're sued for debt. In fact, the Federal Trade Commission notes that people with legal representation often get better results. But for many, the cost is simply out of reach. LawLaw offers a powerful alternative. Our platform uses attorney-reviewed document templates to help you create a professional legal response.

We guide you through a straightforward questionnaire about your case. Based on your answers, we generate a customized Answer document that includes the proper legal defenses. This isn't just a generic form; it's a tailored response designed to protect your rights and challenge the debt collector's claims effectively, giving you access to high-quality legal documents without the high price tag.

We Handle the Filing and Service for You

One of the most stressful parts of a lawsuit is the deadline. You typically have a very short window—often less than 30 days—to file your official response with the court. If you miss it, the court can issue a default judgment against you, allowing the debt collector to win automatically and potentially garnish your wages or seize funds from your bank account.

LawLaw takes the pressure of deadlines and complex procedures off your shoulders. We don't just help you prepare the documents; we handle the logistics for you. Our team researches the specific filing rules for your court, calculates any fees, files the paperwork on your behalf, and ensures the documents are properly served to the opposing party. We provide status updates along the way, so you always know your case is on track.

Choose a Plan That Fits Your Needs

Every debt situation is unique, and your response should be too. Some people simply need to file an Answer to avoid a default judgment, while others may want to explore negotiating a settlement. That’s why we offer different plans to match your specific goals. Our Standard Plan covers all the essentials for preparing your official response and getting it filed correctly and on time.

If you want additional support, our Premium Plan includes access to our negotiation module and a strategy call with a legal specialist. Negotiating with a debt collector can be tricky, and as some experts note, saying the wrong thing can sometimes hurt your case. Our premium tools and guidance help you navigate those conversations confidently, empowering you to work toward a resolution that makes sense for you.

Take the Next Step to Protect Yourself

Facing a lawsuit is incredibly stressful, but the single most important thing to remember is that you have options. The worst thing you can do is nothing. A huge number of people who are sued for debt—as many as 70-90%—never respond, which leads to an automatic loss through a default judgment. This can result in wage garnishment or bank account seizures.

But that doesn't have to be your story. Taking action is the first step toward regaining control of the situation. Responding to the lawsuit forces the credit card company or debt collector to prove their case, and it gives you the opportunity to defend yourself. You don’t have to figure it all out alone. Below are two simple, powerful actions you can take right now to protect your rights and start building your defense.

Use Our Free Debt Validation Tool

Before you do anything else, you should make the debt collector prove they have the right to sue you. A debt validation letter is a formal request that requires the collector to provide evidence that you actually owe the debt and that the amount is correct. This is a critical first step in your defense. The Consumer Financial Protection Bureau advises that you must file a formal written response to the court, and challenging the debt is a key part of that. Sending a validation letter puts the ball back in their court. You can use our free tool to generate a Debt Validation Letter and demand the proof you’re entitled to see.

Get Help Preparing Your Response Today

After demanding validation, you still need to file a formal "Answer" with the court by your deadline. This legal document is your official response to the lawsuit’s claims. While you can do this on your own, getting help can make a significant difference. Studies show that people who have assistance when sued by debt collectors often achieve better outcomes. If hiring an attorney feels out of reach, there are other ways to get support. LawLaw was created to make responding to a debt lawsuit easy and affordable. We can help you prepare and file the right documents to avoid a default judgment and protect your rights.

Related Articles

• What to Do When a Credit Card Sues You
• Getting Sued by a Credit Card Company
• What to Do If Being Sued by Credit Card Company

Frequently Asked Questions

Should I still respond to the lawsuit if I know I owe the debt? Yes, absolutely. Responding to a lawsuit isn't just about denying a debt; it's about protecting your rights within the legal process. Filing an Answer forces the collector to prove every part of their claim, from the exact amount to their legal right to sue you. It also preserves your ability to negotiate a settlement or payment plan. Ignoring the suit guarantees you lose all leverage and face a default judgment, which can lead to wage garnishment.

Can I just call the collector to work things out instead of filing an Answer? While you can always attempt to negotiate, a phone call does not stop the legal process. The lawsuit has a strict, court-mandated deadline that you must meet by filing a formal, written Answer. Failing to do so will result in an automatic loss. You can certainly continue to negotiate after you file, but your first priority must be to respond legally to the court to protect yourself.

What's the difference between a Debt Validation Letter and an Answer? Think of them as two distinct tools for different purposes. A Debt Validation Letter is a formal request you send directly to the debt collector, demanding they provide proof that the debt is valid and belongs to you. An Answer is a formal legal document that you file with the court to respond to the specific claims made in the lawsuit. The Answer is the official step required to prevent a default judgment against you.

Will responding to the lawsuit make things worse or more expensive? This is a common fear, but not responding is what truly makes things worse. Ignoring the lawsuit leads to a default judgment, which often adds court costs and other fees to the amount you owe. By responding, you show the collector that you won't be an easy win. This action often puts you in a much stronger position to negotiate a favorable settlement, potentially for less than the original amount claimed.

What happens after I file my Answer with LawLaw? Once your Answer is filed with the court, the immediate threat of a default judgment is removed. The legal process continues, but now the burden shifts back to the debt collector to prove their case. From here, they may try to provide evidence to the court, or they might become more willing to negotiate a settlement with you. Filing your Answer officially opens the door for you to resolve the situation from a position of strength.