What to Do When Sued by a Credit Card Company

That official-looking envelope from the court can stop your heart for a second. If you’ve just been served papers and are thinking, “I’m being sued by a credit card company,” don’t let fear lead to inaction. Ignoring the lawsuit is the one mistake that guarantees you will lose. Responding is your first and best line of defense. It forces the collector to do their job and prove every part of their claim. This article provides a straightforward roadmap for what to do next, helping you move from a state of shock to a position of strength and confidence.

Key Takeaways

• Ignoring the lawsuit is your worst move: Your most critical task is to file a formal "Answer" with the court before the deadline, which is usually 14 to 30 days. Failing to respond results in an automatic loss, allowing the collector to garnish your wages or seize bank funds.
• The burden of proof is on them, not you: You have powerful defenses available. You can force the collector to prove they own the debt, check if the statute of limitations has expired, and use your rights under the Fair Debt Collection Practices Act (FDCPA) to fight back.
• Responding opens the door to resolution: Filing an Answer puts you in a stronger position to negotiate. You can often settle the debt for less than the full amount or arrange a payment plan, but always get the final agreement in writing before sending any money.

Sued by a Credit Card Company? Here Are Your First Steps

Getting a lawsuit in the mail is a jarring experience. It’s designed to feel intimidating, but it’s important to know that you have rights and a clear path forward. The single worst thing you can do is ignore the paperwork. Taking action puts you back in control of the situation. The process starts with a few simple, organized steps to understand what you’re facing and prepare your response. By tackling this head-on, you can protect your finances and work toward a resolution. Let’s walk through exactly what you need to do first.

First, Take a Breath—You Have Options

Seeing a legal notice with your name on it can send anyone into a panic. Before you do anything else, take a moment to breathe. While the situation is serious, it is also manageable. You are not out of options. Getting sued for credit card debt is stressful, but acting quickly is the best way to protect your finances and your rights. The company suing you is counting on you to feel overwhelmed and do nothing. By simply reading the documents and making a plan, you are already taking a powerful step. Remember, this is a civil matter, not a criminal one. You won't go to jail over credit card debt.

Read Every Word of the Lawsuit

Now, turn your attention to the documents you received. You likely have a “Summons” and a “Complaint.” The Summons is the official court notice telling you that you’ve been sued. The Complaint is the document that explains why. Read both papers carefully from start to finish. Look for key pieces of information: who is suing you (the plaintiff), the exact amount of money they claim you owe, and the court where the case was filed. According to the Consumer Financial Protection Bureau, it’s critical to understand these details. Pay close attention to whether the plaintiff is your original credit card company or a debt buyer you don’t recognize.

Find Your Deadline to Respond

This is the most important piece of information in the entire packet. The Summons will state how many days you have to file a formal response with the court. This deadline is strict and non-negotiable. Typically, you have between 14 and 30 days from the day you receive the papers. Mark this date on your calendar immediately. Missing it can lead to a default judgment, which means you automatically lose the case and the collector can begin garnishing your wages or seizing funds from your bank account. Filing a response, called an "Answer," is how you officially tell the court you are participating in the lawsuit and defending yourself. You can prepare your Answer to meet this critical deadline.

Collect All Your Documents

Your personal records are a vital part of your defense. Start gathering any documents you have related to the credit card account in question. This includes old account statements, the original cardholder agreement, and any letters or emails you’ve exchanged with the creditor or collection agency. These documents can help you verify if the amount they claim you owe is accurate and if the debt is even yours. The company suing you has the burden of proof; they must be able to show that you owe the debt and that they have the legal right to collect it. You can formally request this proof by sending a Debt Validation Letter, which demands they provide documentation to back up their claims.

What Happens If You Ignore the Lawsuit?

When you’re staring at a lawsuit from a credit card company, the urge to just ignore it can be overwhelming. It’s a stressful, isolating experience, and it’s tempting to hope the whole thing will just disappear if you don’t engage. But ignoring a lawsuit is one of the worst things you can do. The problem won’t go away—in fact, it will get much bigger and harder to solve. The legal system is designed to move forward whether you participate or not, and failing to act gives the company suing you all the power.

Think of it this way: the debt collector has made a formal accusation in court. By not responding, you’re essentially pleading guilty without a fight. You lose your chance to tell your side of the story, to question whether the debt is even valid, or to check if the amount they claim is accurate. Debt collectors often count on people being too intimidated or confused to respond because it’s an easy win for them. They file thousands of these lawsuits, and a significant percentage of them result in default judgments simply because the person being sued never replied. But taking action, even if it feels daunting, is the only way to protect your finances and your rights. Let's break down exactly what happens when you don't respond, so you can see why it's so important to face this head-on.

You Could Face a Default Judgment

If you don’t file a formal response with the court by your deadline, the credit card company can ask for—and almost always win—a default judgment against you. Think of it as an automatic loss. Because you didn't show up to defend yourself, the court assumes you agree with the debt collector's claims. The judge only hears their side of the story and will likely rule in their favor. According to CBS News, this judgment legally confirms you owe the debt and opens the door to aggressive collection methods. It’s a critical misstep that takes away your chance to challenge the lawsuit or negotiate a better outcome.

They Can Garnish Your Wages and Seize Assets

Once a creditor has a default judgment, they have powerful legal tools to collect the money. The Consumer Financial Protection Bureau explains that a judgment can allow them to take money directly from your paycheck through wage garnishment. They can also freeze the funds in your bank account or place a lien on your property, like your home or car, making it impossible to sell until the debt is paid. The original debt can also grow significantly, as the judgment will likely include the amount you owed plus interest, court costs, and the collector’s attorney fees. What started as a manageable credit card balance can quickly become a much larger financial crisis.

Your Credit Score Will Take a Major Hit

Beyond the immediate financial threat, a default judgment causes long-term damage to your credit. A judgment is a public record that will be added to your credit report, where it can stay for up to seven years. This is a major red flag for future lenders, landlords, and even some employers. A judgment can cause your credit score to plummet, making it incredibly difficult to get approved for a car loan, a mortgage, or even a new credit card. Rebuilding your credit after a judgment is a slow and difficult process. Protecting your financial future starts with responding to the lawsuit and avoiding this serious negative mark on your record.

How to Respond to a Credit Card Lawsuit

Receiving a lawsuit can feel paralyzing, but the single most important thing you can do is take action. Ignoring the problem won't make it disappear; in fact, it guarantees you will lose. Responding to the lawsuit is your official way of telling the court and the credit card company that you are not giving up. It forces them to prove their case and gives you the opportunity to defend yourself. The process starts with a formal document called an "Answer," where you respond to the claims and raise your defenses. It might sound complicated, but breaking it down into manageable steps makes it much clearer.

File an "Answer" with the Court

Your first official move is to file an "Answer" with the court. This is a legal document that responds to each allegation made in the lawsuit. You typically have a strict deadline, often between 14 and 30 days, so it's crucial to act quickly. Filing an Answer prevents the credit card company from winning automatically through a default judgment. It signals that you are actively participating in the case and require the plaintiff to prove their claims against you. This document is your chance to formally deny their allegations and introduce your defenses, setting the stage for the rest of the legal process. LawLaw can help you generate and file your Answer correctly and on time.

Understand Your Defense Options

You don't have to be a lawyer to have a valid defense. A defense is simply a reason why the credit card company shouldn't win the lawsuit. Common defenses include the amount being wrong, the debt not belonging to you, or that you've already paid it. You can also challenge the lawsuit if the company suing you has incomplete or inaccurate paperwork. The burden of proof is on them, not you. Your Answer is where you will list these "affirmative defenses." Think of it as creating a checklist of items the plaintiff must prove to the court, making their job much harder.

Is the Debt Too Old to Collect?

Every state has a law called the statute of limitations, which sets a time limit for how long a creditor can sue you over a debt. For credit card debt, this period is typically between three and six years, but it varies by state. If the company is suing you for a debt after the statute of limitations has expired, the debt is considered "time-barred." This is a complete defense, and you can ask the court to dismiss the case entirely. You can check your state's statute of limitations to see if this powerful defense applies to your situation. Be sure to raise it in your Answer if it does.

Can They Prove They Own the Debt?

Often, the company suing you isn't your original credit card company. It's likely a third-party debt buyer that purchased your old debt for pennies on the dollar. If this is the case, they must prove they have the legal right—or "standing"—to sue you. This requires them to produce a clear paper trail showing the complete chain of ownership from the original creditor to them. Many debt buyers have sloppy records and may not be able to provide this documentation. Challenging their ownership of the debt is a common and effective defense strategy that can get a lawsuit dismissed.

Follow the Correct Filing Process

Once your Answer is prepared, you must file it correctly. This involves more than just writing the document. You need to submit it to the correct court clerk before your deadline, pay any required filing fees, and formally deliver a copy to the plaintiff's attorney—a process called "service." Each court has its own specific rules for formatting, filing, and service. Failing to follow these procedures exactly can cause your Answer to be rejected, which could lead to a default judgment against you. It’s a step where attention to detail is critical, ensuring your response is properly recorded and your rights are protected.

What Are Your Rights When Sued for Credit Card Debt?

Getting a lawsuit notice is stressful, but it’s not a final verdict. The legal system gives you specific rights to protect you from mistakes, missing information, and unfair collection practices. Understanding these rights is your first line of defense. It shifts the power dynamic, forcing the company suing you to prove its case according to the law. You have the right to question the debt, to be treated fairly, and to present your side of the story. Knowing these protections can make a huge difference in the outcome of your case.

You Can Demand They Validate the Debt

Before you do anything else, you have the right to make the debt collector prove the debt is actually yours and that they have the legal right to collect it. This is called debt validation. You can formally request documentation like the original signed credit agreement, a complete history of account statements, and proof that they legally purchased the debt if they are a third-party collector. According to CBS News, this is a critical first step. If the collector can’t produce this paperwork, their case against you weakens considerably. Many debt buyers purchase debts with incomplete records, so they may not have the proof they need to win in court.

Know Your Protections Under the FDCPA

You are protected by a powerful federal law called the Fair Debt Collection Practices Act (FDCPA). This law sets strict rules for how debt collectors can behave. They cannot harass you, lie to you, or use unfair tactics. For example, they can’t call you before 8 a.m. or after 9 p.m., threaten you with arrest, or contact your employer about your debt. If a collector violates the FDCPA—by failing to deliver the lawsuit properly or filing it in the wrong court, for instance—you can use these violations in your defense. In some cases, these violations can even lead to the lawsuit being dismissed entirely.

You Have the Right to Get Legal Help

You do not have to face a lawsuit alone. You have the right to seek legal assistance, whether that means hiring an attorney or using more accessible legal tools. A legal professional can help you understand the claims against you and explore your defense options. The Consumer Financial Protection Bureau advises that getting legal help is a good idea to ensure your rights are protected. While hiring a traditional lawyer can be expensive, platforms like LawLaw exist to provide affordable and straightforward tools to help you respond to your lawsuit correctly and confidently, without the high legal fees.

The Collector Has the Burden of Proof

In a debt collection lawsuit, the responsibility is not on you to prove you don't owe the money. The legal responsibility, known as the "burden of proof," is entirely on the credit card company or debt collector. They must convince the court that the debt is valid, the amount is accurate, and you are the person who owes it. If you file a formal Answer to the lawsuit, you are officially challenging them to meet this burden. If they lack the evidence—like the original contract or a clear accounting of the debt—they may not be able to prove their case, and you could win.

How Can You Settle or Resolve the Lawsuit?

Receiving a lawsuit doesn’t automatically mean you’re headed for a long, drawn-out court battle. In many cases, the most practical path for both you and the creditor is to find a middle ground. Resolving the lawsuit outside of court can save everyone time, stress, and money. Debt collectors are businesses, and for them, a guaranteed partial payment now is often better than the uncertainty and expense of a trial later. This section will walk you through your main options for settling the matter, from negotiating a deal to using tools that can help you along the way. Remember, you have more power in this situation than you might think, and exploring a resolution is a proactive step toward putting this debt behind you.

Negotiate a Lump-Sum Settlement

If you have some savings or access to funds, a lump-sum settlement can be a powerful way to resolve the lawsuit for good. This involves offering to pay a one-time, single payment that is less than the total amount you owe. You might be surprised to learn that many creditors are open to this, sometimes accepting a fraction of the original debt. Start by offering a low but reasonable amount and be prepared to negotiate. The most important rule: get everything in writing before you pay a dime. The written agreement should clearly state that your payment settles the debt in full and that the company will dismiss the lawsuit against you.

Arrange an Affordable Payment Plan

A lump-sum payment isn't realistic for everyone, and that's okay. Another common resolution is to negotiate a payment plan. This allows you to pay back the debt over time through a series of smaller, more manageable monthly payments. While you may end up paying closer to the full amount owed, this option can provide the breathing room you need to handle the debt without draining your savings. Just like with a lump-sum settlement, it is crucial to get the terms of your payment plan in writing. The agreement should detail the exact amount of each payment, the due dates, and confirmation that as long as you follow the plan, all collection activity will stop.

Decide if You Need Professional Help

Facing a lawsuit alone can feel incredibly stressful, and it's easy to feel outmatched. Getting professional guidance can help you understand your rights and make sure you're not being taken advantage of. While hiring a traditional attorney can be costly, it's not your only option. Legal technology platforms like LawLaw are designed to make legal help accessible and affordable, empowering you to respond to your lawsuit with confidence. The Consumer Financial Protection Bureau also recommends seeking legal assistance to understand your protections under federal and state law.

Use Free Tools to Support Your Case

You don't have to start from scratch when preparing your response or communicating with a debt collector. There are many free resources available to help you create the formal documents you need. For example, before you even consider settling, you have the right to make the collector prove the debt is yours. Using a free tool like LawLaw's Debt Validation Letter Generator can help you draft a formal request for this information. These tools guide you through the process, ensuring your communications are clear, professional, and legally sound. Taking advantage of these resources is a smart first step in building your case and protecting your rights.

Related Articles

• What to Do If You're Being Sued by a Credit Card Company
• Getting Sued by a Credit Card Company: Your Next Steps

Frequently Asked Questions

Do I really need to hire an expensive lawyer to handle this? Not necessarily. While hiring a traditional attorney is one option, it's not the only path forward, especially when cost is a major concern. The most critical step is filing a formal Answer with the court on time, which you can do without a lawyer. Services like LawLaw are designed to help you create and file the correct legal documents affordably, giving you a way to protect your rights without the high legal fees.

What if I don't recognize the company that's suing me? This is a very common situation. Your original credit card company often sells old debts to third-party debt buyers for a low price. These debt buyers then try to collect the full amount. If you don't recognize the plaintiff's name, it's a strong signal that you should challenge them to prove they legally own your debt. They must provide a clear paper trail showing the transfer of ownership, and if they can't, their lawsuit may not be valid.

If I file a response, does that mean I have to go to court? Filing an Answer doesn't automatically mean you'll be in a courtroom next week. In fact, most debt lawsuits never make it to trial. Responding simply preserves your right to defend yourself and forces the collector to prove their case. Often, once you've filed an Answer, the next step is negotiation, or the case might be dismissed if the collector can't produce the required evidence.

Is it actually possible to win a credit card lawsuit? Yes, it is absolutely possible. Winning doesn't always mean a dramatic trial scene; it can mean getting the case dismissed because the debt is too old (past the statute of limitations) or because the debt collector can't prove they own the debt. It can also mean negotiating a settlement for a much lower amount than what they were suing you for. By responding, you give yourself a chance to find these paths to a positive outcome.

What's the difference between sending a Debt Validation Letter and filing an Answer? Think of them as two different tools for two different jobs. A Debt Validation Letter is a formal request you send directly to the debt collector, demanding they provide proof that the debt is yours and that they have the right to collect it. An Answer is a formal legal document you file with the court to respond to the lawsuit itself. The Answer is the most time-sensitive and crucial step because it's what prevents you from losing the case automatically.