Your options when you're sued for a debt

If you're being sued for a debt, your first step is to decide if you want to respond and defend yourself by arguing that you either don't owe the money or that you don't owe as much as the debt collector claims. Or, you can choose to do nothing and the judge will make a decision about the case without your input.

Important things to know before you decide

  • You will not go to jail for having an unpaid debt or losing a court case to a debt collector
  • You may still be able to negotiate and settle your debt, often for less than you owe  
  • If you decide to respond and defend your case, it is up to the creditor to prove that you owe the money  
  • If you lose, there are limits as to what the other side can take from you to collect the judgment (the money you're ordered to pay)
  • In some types of cases, you can file a request to a payment plan if you lose

Get additional help. 

Debt lawsuits can be complicated and time consuming. Find legal help and resources.
If you want help understanding the Summons and Complaint you received, learn how to interpret these forms.

Option 1: Respond and defend yourself

If you decide you want to defend yourself in court, the first step is filing a response with the court. This usually means you file an Answer. If you file an Answer, the other side must prove their case and you can defend your case in court.

  • Advantages
    • You can defend yourself and force the other side to prove the case.
    • It extends your time to work out a settlement.
    • You can use a court process called “discovery” to force the other side to give you their evidence (proof)
  • Disadvantages
    • Defending yourself can be difficult and time-consuming. 
    • You will likely spend about a year or more involved in the case if it doesn’t settle.
    • You may have to pay the other side's attorney's fees. The Creditor must include the request for attorney’s fees in the initial Complaint. If they do and you choose to file an Answer and defend yourself, it can affect the amount of attorney’s fees awarded if they win.
Defending yourself can be difficult and time-consuming. You may spend as much as a year involved in the case.

A lawsuit is a drawn-out process that is fought primarily on paper and only goes to court at the end. If you respond, but then ignore the next steps, it is possible to not only lose your case but to make your case more expensive. 

When you file your response with the court you will pay a filing fee of $225-$450 depending on the type of case. You can ask to court to waive this fee if you cannot afford it.

Learn how to respond to the lawsuit

Even if you decide to respond to the lawsuit, you can still try to negotiate and reach a settlement before the case goes to trial. Responding to the lawsuit may also give you more time to negotiate and put you in a better negotiating position.

Tips for negotiating with a debt collector

Option 2: Do nothing

You can also choose not to respond to the case. If you do not respond, the court will make a decision without you. This is called a default or default judgment. Whether or not you decide to respond, you can still attempt to negotiate with the debt collector. 

  • Advantages
    • This may be a good option if you agree that you owe the debt and don't want to negotiate.
    • This may also be a good option if you do not have any assets that can be taken in collections.
  • Disadvantages
    It's likely the debt collector will win and you will have to pay what they say you owe.

Learn what happens in a default 


If you are unable to pay your debts or reach some settlement on them, you may benefit from bankruptcy.

Depending on your assets and income, bankruptcy can either cancel (discharge) your debts, or allow you to create a partial repayment plan and discharge your debts at the end of the plan.

Bankruptcy is complicated and is handled in federal court, so is not covered in detail here. 

If you think bankruptcy may be a good option for you, talk to a bankruptcy lawyer. 

If you file for bankruptcy while a debt case is open, the debt case is automatically paused (stayed). This means it can’t move along until the bankruptcy is done, or the court decides that the debt case should start up again. 

Option 3: Pay the debt and get the case dismissed

If you are able to pay the amount owed or able to negotiate to pay a portion of what you owe and settle the case, you'll need to also ask the Plaintiff to officially dismiss the case against you. Paying the debt does not automatically dismiss the case.

Learn how to ask for a dismissal

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