Getting served with a credit card debt lawsuit can be terrifying — especially if you don’t have the money to pay the debt.
You may be asking yourself:
- “Am I going to lose everything?”
- “What do I file with the court?”
- “How much time do I have?”
- “Do I need a lawyer?”
- “What happens if I do nothing?”
The good news is this:
You still have rights — and you may have defenses.
Here’s a step-by-step guide on what to do if you’ve been sued for credit card debt.
Step 1: Don’t Ignore the Lawsuit
The worst thing you can do is nothing.
If you ignore the lawsuit, the creditor or debt buyer may obtain a default judgment, which can lead to:
- wage garnishment
- frozen bank accounts
- liens on property
- added court costs and interest
Even if you cannot afford to pay, you must respond to protect yourself.
Step 2: Check the Deadline to Respond
Most states give you a limited amount of time to file a response after you are served.
Common deadlines include:
- 20 days
- 21 days
- 30 days
The deadline depends on your state and the type of court.
⚠️ Important: The countdown often starts from the day you were served, not the date on the paperwork.
If you miss the deadline, you may lose automatically.
Step 3: Identify Who Is Suing You
This is a big one.
Many people assume they are being sued by the original credit card company (like Capital One, Chase, Discover, or Citibank).
But often, the lawsuit is filed by a debt buyer, such as:
- Midland Funding
- Portfolio Recovery Associates
- LVNV Funding
- Cavalry SPV
- CACH, LLC
- Jefferson Capital
- Unifin
- PRA Group
Why this matters: Debt buyers often lack complete documentation, and that can affect their ability to prove the case.
Step 4: Read the Complaint Carefully
The complaint will list allegations such as:
- the amount owed
- the account number (sometimes partial)
- the date of default
- whether the claim is based on contract, account stated, or unjust enrichment
- whether the plaintiff claims they “own” the debt
Look for red flags like:
- wrong amount
- wrong account type
- wrong dates
- accounts you don’t recognize
- missing documentation
- claims that seem vague or generic
Step 5: Verify Whether You Were Properly Served
If you were not properly served, the case may be challengeable.
Examples of improper service:
- papers left with a neighbor
- served at the wrong address
- mailed incorrectly
- served on someone who isn’t you
- “sewer service” (false proof of service)
Even if service was improper, do not ignore the lawsuit — but it may be an important defense.
Step 6: Decide Your Strategy (Defend, Settle, or Bankruptcy)
Before filing anything, decide what outcome you want.
Common strategies include:
Option A: Fight the Lawsuit
This may make sense if:
- the debt isn’t yours
- the amount is wrong
- the statute of limitations has expired
- the plaintiff lacks proof
- you suspect identity theft
- the debt buyer cannot prove ownership
Option B: Negotiate a Settlement
Settlement may be possible if:
- you want to avoid court
- you can offer a lump sum
- you can afford a payment plan
- you want to avoid a judgment
Option C: Consider Bankruptcy
Bankruptcy may be appropriate if:
- you have multiple debts
- multiple lawsuits are pending
- garnishment is imminent
- repayment is impossible
Step 7: File an Answer With the Court
This is the most important step.
Your Answer is the legal document where you respond to the lawsuit allegations.
In the Answer, you typically:
- admit, deny, or state you lack knowledge of each allegation
- assert defenses (called affirmative defenses)
- request dismissal if appropriate
⚠️ If you do not file an Answer, the creditor may win by default.
Step 8: Use Proper Responses in Your Answer
Each numbered paragraph in the complaint must be answered.
Your response options usually include:
- Admit (only if it is 100% true)
- Deny
- Deny for lack of knowledge (common if you don’t have documentation)
Most consumers should be cautious about admitting anything unless they are sure.
Step 9: Raise Common Defenses (Affirmative Defenses)
Common defenses in credit card debt lawsuits may include:
✔ Lack of Standing
The plaintiff must prove they legally own the debt.
Debt buyers often struggle to prove this.
✔ Statute of Limitations
Every state has a deadline for filing lawsuits.
If the debt is too old, the case may be time-barred.
✔ Improper Service
If you weren’t served correctly, the case may be challenged.
✔ Failure to State a Claim
Some complaints are vague and lack required details.
✔ Incorrect Amount / Accounting Errors
Many lawsuits include inflated balances, fees, or interest errors.
✔ Identity Theft or Mistaken Identity
If the debt is not yours, this can be a strong defense.
Step 10: File the Answer Correctly (and Serve the Plaintiff)
After drafting your Answer, you must:
- File it with the court clerk (in person or electronically, depending on the court)
- Send a copy to the plaintiff’s attorney
- Keep proof of filing and proof of service
Failing to serve the plaintiff’s attorney can cause problems later.
Step 11: Show Up to All Court Dates
Even after filing an Answer, you must take the case seriously.
If you miss a hearing, the creditor may still obtain judgment.
Court appearances may include:
- pretrial conferences
- mediation
- settlement conferences
- motions hearings
- trial
Step 12: Demand Proof of the Debt
Many debt buyers file lawsuits without full documentation.
Depending on the court process, you may be able to request:
- original credit card agreement
- account statements
- payment history
- charge-off statements
- assignment documents (bill of sale)
- affidavit of sale
- chain of title proving ownership
If they can’t prove their case, you may have leverage for dismissal or settlement.
Step 13: Consider Counterclaims (FDCPA / FCRA Violations)
Sometimes the lawsuit itself—or the collection behavior leading up to it—may violate consumer laws.
You may have claims under:
- FDCPA (Fair Debt Collection Practices Act)
- FCRA (Fair Credit Reporting Act)
- state consumer protection statutes
Examples include:
- suing on a time-barred debt
- misrepresenting the amount owed
- improper collection communications
- reporting inaccurate information to credit bureaus
These claims may increase your leverage significantly.
Step 14: Negotiate Settlement the Smart Way
If you choose to settle, it’s important to:
- get all terms in writing
- confirm the settlement satisfies the full debt
- avoid agreements that allow future lawsuits
- confirm whether the case will be dismissed with prejudice
- confirm whether the creditor will report the account as settled
Never rely on verbal promises.
Step 15: Get Legal Help If You Can
Many people think:
“If I hire a lawyer, it will cost more than the debt.”
But a consumer attorney may be able to:
- challenge weak documentation
- negotiate a reduced settlement
- prevent a judgment
- stop wage garnishment
- evaluate FDCPA/FCRA violations
- protect your assets
Even one consultation can help you avoid costly mistakes.
What If You Already Missed the Deadline?
If you missed your deadline, act immediately.
You may still have options, such as:
- filing a late Answer (sometimes allowed)
- filing a motion to open or strike a default judgment
- challenging improper service
Courts have strict rules, so timing is critical.
Frequently Asked Questions
Can I go to jail for credit card debt?
No. Credit card debt is civil, not criminal.
Should I call the debt collector’s attorney?
You can, but be careful. Anything you say may be used against you. Always get settlement terms in writing.
What if I don’t recognize the debt?
Still respond. Deny the allegations and consider identity theft or mistaken identity defenses.
Will they garnish my wages?
If they obtain a judgment, they may be able to garnish wages depending on state law.
The Bottom Line
If you’ve been sued for credit card debt, the most important step is this:
File an Answer before the deadline.
Even if you cannot afford to pay, responding protects your rights and forces the creditor or debt buyer to prove their case.
Ignoring the lawsuit is what leads to default judgments, garnishment, and frozen bank accounts.
Need Help Responding to a Debt Lawsuit?
If you’ve been served with a credit card lawsuit, an attorney may be able to help you:
- file the proper response
- assert defenses
- negotiate settlement
- avoid judgment
- explore FDCPA/FCRA claims
The sooner you act, the more options you may have.
