A debt collector may be able to file a lawsuit against you if certain conditions are met regarding the debt. Remember, just like you, debt collectors have to comply with federal and state regulations. They also need to have all of their documentary evidence available to win a court case if they reside in a jurisdiction where they have the right to sue you. Regardless of the specifics, if you receive court papers from a debt collector, do not ignore them.
The guide below takes you through what you need to know about debt-related lawsuits.
Key takeaways
- A real debt collector may file a civil lawsuit over a valid debt that is still within the applicable statute of limitations.
- A threat is not the same as a lawsuit. A case begins with a court filing, and state rules control how the required papers must be served.
- Never ignore a summons, even if the debt is unfamiliar, already paid, or too old.
- A written debt dispute does not replace your response to the court.
- Collectors cannot have you arrested simply because you did not pay a consumer debt.
Can a debt collector sue you?
Yes. A creditor or debt collector can file a lawsuit in order to collect on an unpaid credit card, personal loan, medical expense, or other type of consumer debt. In most cases, the lawsuit will be filed in civil court to determine whether you legally owe money.
That being said, simply being contacted by a collection agency does not necessarily mean that a lawsuit will be filed against you. A collector may contact you repeatedly, discuss possible settlement options, sell the account to a collection law firm, or choose not to pursue litigation. Factors that may affect this determination include the balance amount and the collector’s internal company policies.
Below are some common situations.
| Situation | What it generally means |
|---|---|
| The debt is valid and still legally enforceable | The creditor or collector may be able to file a lawsuit. |
| The statute of limitations has expired | A debt collector covered by federal collection law cannot sue or threaten to sue over the time-barred debt. However, the collector may still use lawful methods to request payment in many states. |
| The collector has no intention or legal ability to sue | Federal law prohibits a debt collector from using a false lawsuit threat to pressure you. |
| A lawsuit has already been filed | You must follow the court instructions and deadline. Calling the collector or disputing the debt outside court does not take the place of a formal response. |
The federal Fair Debt Collection Practices Act (FDCPA) primarily applies to debt collectors and does not cover every original creditor in the same way. State laws also differ, and local councils are advised.
How common are debt collection lawsuits?
While a lawsuit is not always the result of an attempt to collect a debt, certain circumstances can increase one’s likelihood of being sued. For example, that risk increases when a person has multiple debts in collections. A CFPB survey published in 2017 found the following shares of consumers who reported being sued after collection contact.
| Consumer group | Share reporting they were sued |
|---|---|
| Contacted about one debt | 6% |
| All consumers contacted about collection debt | 15% |
| Contacted about five or more debts | 35% |
When can a collector legally file a lawsuit?
A collector does not automatically win because it files a case. To obtain a judgment, it generally must support several core parts of its claim.
The correct consumer
The collector must connect the account to the person it sued.
An accurate balance
The claimed amount should account for payments, credits, interest, and lawful fees.
The right to collect
If the debt was sold, the plaintiff must show that it owns the account or has authority to sue.
A timely claim
The lawsuit must fall within the applicable statute of limitations.
The Federal Trade Commission explains that a collector must prove you owe the debt, the amount is correct, and it has the legal right to sue. Your response forces the plaintiff to make that case instead of winning only because you did not participate.
How long does a debt collector have to sue you?
The statute of limitations sets the period for filing a lawsuit. There is no single national deadline for consumer debt. According to the Consumer Financial Protection Bureau, most states or jurisdictions use periods between three and six years, although some periods are longer.
The correct deadline can depend on the following:
| Factor | Why it matters |
|---|---|
| Type of debt | Written contracts, open accounts, promissory notes, and other obligations may have different limits. |
| Applicable state law | The law may come from where you live, where the agreement was signed, or the state named in the contract. |
| Starting date | The clock may start after a missed payment, the last payment, or another event defined by state law. |
| Later activity | A payment, written acknowledgment, or promise to pay may restart the period in some states. |
Although a time-barred debt is no longer enforceable under state statutes of limitations, the creditor or collection agency may continue to request payment for a period of time, provided they comply with the relevant laws of their respective state. Federal Regulation F also prohibits the action of a covered debt collector in filing suit against you for the purpose of collecting on an expired statute of limitations. Thus, even though you are protected by federal regulation from being sued on the time-barred debt, do not ignore summons issued in response to your default. The CFPB indicates that although you have raised the expired statute of limitations as a defense in your absence, a judgment could be entered against you.
Can a partial payment restart the statute of limitations?
Yes, it may. The outcome will depend upon state statute and your account specifics. Some states stipulate that even a minimal amount must be paid to revive the statute of limitations on an account from years prior. Your written agreement to accept liability could also restart the statute of limitations.
Before making a payment to settle an older collection account, you should first request information about the ages of the debts, the date of the last payment made by you or anyone else regarding this account, the name of the original creditor and the applicable laws that the collector claims apply.
Is the lawsuit warning real or a debt collector scam?
Debt collector scams may try to scare consumers by using “lawyer,” “case #,” or “Final Notice” in their communications. Some fraudsters will claim to work for a debt-collection law firm or represent themselves as an attorney or court staff. The appearance of a legitimate email and/or a reputable-looking call display does not mean there is a valid case against you.
Signs of a real court case
- The documents identify a real court.
- The papers include the parties, case number, claims, and response instructions.
- You can confirm the case through the court’s official website or clerk’s office.
- The plaintiff and attorney have verifiable contact information.
Signs of a possible scam
- The caller threatens immediate arrest over an unpaid consumer debt.
- They refuse to provide a mailing address or debt details.
- They demand immediate payment before you can verify the claim.
- The debt is unfamiliar, and the caller will not provide validation information.
What should you do if a debt collector serves you with a lawsuit?
Focus first on the deadline, and then reference the following 5 steps below:
Your first five steps
- Read every page. Find the court name, case number, plaintiff, amount claimed, hearing date, and response deadline.
- Confirm the case. Contact the court clerk through the court’s official website or phone number. Do not rely only on information in a text or email.
- Do not miss the deadline. Follow the court’s instructions even if you believe the lawsuit is wrong.
- Gather your records. Collect statements, payment records, settlement letters, validation notices, credit reports, and all messages from the collector.
- Get legal help. Contact a consumer-law attorney, debt-defense lawyer, or local legal aid office. Ask whether the debt is time-barred and what defenses may apply.
What should you review before responding?
Your attorney or legal aid provider can help you compare the lawsuit with your records. Important questions include:
- Is this your account, or could it belong to someone else?
- Does the balance include interest or fees that do not match the agreement or state law?
- Did you already pay, settle, discharge, or otherwise resolve the debt?
- Can the plaintiff show that it owns the debt?
- Is the claim outside the statute of limitations?
- Were you sued in the correct place under the rules that apply?
- Did the plaintiff follow your state’s service and filing requirements?
What happens if you ignore a debt collection lawsuit?
The court may enter a default judgment because you did not respond or appear. A default judgment does not necessarily mean the court reviewed every defense you could have raised; it just means the plaintiff won because you did not take the required step. If you do lose the case, there are several ways the state can claw back the money from you.
Wage garnishment
A court-approved process may direct part of eligible wages toward the judgment.
Bank account action
The collector may ask to freeze or take nonexempt money from an account.
Property lien
A lien may attach to property and affect a future sale or refinance.
Added costs
A judgment may include lawful interest, court costs, or attorney fees.
Federal and state laws protect some income and property from collection. Exemptions can apply to Social Security benefits, certain public benefits, and other protected funds, but the rules vary. A local attorney can explain which protections fit your situation.
Can you settle a debt after a lawsuit has been filed?
Yes, if you settle your case before the court enters a final judgment, there is still potential for settlement. The lawsuit remains active until the court’s docket shows that the case was paused or dismissed.
Prior to making payment, request a written agreement from the opposing party that outlines the settlement amount, the conditions of the payment, any additional charges assessed as part of the payment, and what actions will be taken in regard to the lawsuit.
When should you contact a debt collector lawyer or attorney?
Look for a lawyer who represents consumers in debt collection defense, consumer law, or FDCPA matters. The term “debt collector attorney” can also describe a lawyer working for the collector, so confirm whom the lawyer represents before sharing details.
When legal help becomes important
- You have received a summons, complaint, hearing notice, or judgment.
- The debt is old and may be outside the statute of limitations.
- You do not recognize the debt or believe the amount is wrong.
- The collector claims to own a debt that has changed hands several times.
- Your wages, bank account, or property may be at risk.
- The collector used threats, deception, or abusive conduct.
- You have several lawsuits or more debt than you can realistically repay.
If cost is a concern, search the Legal Services Corporation directory for a local legal aid organization. The CFPB also recommends looking for an attorney with experience in consumer law, debt collection defense, or the FDCPA.
How Revi may help with qualifying collection debt
Addressing delinquent or collection debt before a lawsuit may give you more room to review settlement options. Revi helps eligible consumers assess qualifying debt and build a payment structure around what they can realistically afford.
The Revi process may include:
- Reviewing qualifying delinquent, charged-off, or collection accounts
- Assessing monthly affordability
- Arranging an agreed-upon settlement with a participating creditor
- Structuring repayment over an available term
- Using a restricted-use account from a financial partner to support the settlement repayment
The consumer cannot withdraw or spend funds from the restricted-use account. Depending on the account and reporting practices, on-time payments may also help establish positive payment history. Results vary, and positive credit outcomes are not guaranteed.
Review all available settlement and program terms, including fees, before enrolling. Revi is not a law firm and does not provide legal representation. It cannot guarantee creditor participation, prevent a lawsuit, stop a case that has already been filed, or replace the court response process. If you have been served, handle the court deadline first and speak with a qualified attorney about your legal options.
Do not wait for collection debt to become a court problem
Revi may help eligible consumers explore an affordable settlement path for qualifying debt before the situation escalates.
FAQ
Can a debt collector garnish your wages without suing you?
No, in the vast majority of ordinary consumer debt cases, a debt collector needs to sue you before they can garnish any wages.
But it must be stated that the CFPB notes that certain government debts may lead to garnishment without a judgment. Different procedures may also apply to taxes and child support. State law controls many garnishment limits and exemptions, so review any notice with a local attorney.
Can you go to jail for not paying a debt collector?
No. A debt collector cannot have you arrested simply because you failed to pay a consumer debt. Debt collection lawsuits are civil cases. However, failing to follow a court order may create a separate issue. Never ignore a summons, hearing notice, or order from a real court.
Article sources
- Consumer Financial Protection Bureau: Can debt collectors collect a debt that’s several years old?
- Consumer Financial Protection Bureau: Regulation F and time-barred debt
- Federal Trade Commission: Fake and abusive debt collectors
- Consumer Financial Protection Bureau: Finding a lawyer for a debt collection issue
- Consumer Financial Protection Bureau: Wage, benefit, and bank account garnishment
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