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What do you do if you are sued by a debt collector?

If you have been sued by a debt collector, it is important that you do not just ignore it and hope it will go away. You may have some defenses and legal claims that you must move quickly to assert. While this post should be no substitute for an actual consultation with an attorney, we will try to walk through some of the more frequent questions and issues that arise after someone has been sued on a consumer debt.

Who is actually suing you?

If you have been served with a collections lawsuit, it is often a good first step to see who the plaintiff is. If it is a debt buyer who took over your account, then you typically have more rights than if it is the original creditor, and it is therefore typically easier to defend such cases. For example, in California, the Fair Debt Buying Practices Act (FDBPA) gives you added protections against debt buyers. We will post more information about debt buyers and FDBPA in a future post.

Statute of limitations

The statute of limitations is not always straight forward. Generally speaking, in California, the limitations period is four (4) years, running from the date of the last payment or repayment agreement. However, sometimes it may be shortened (if, for instance, it is based on a contract with a choice-of-law provision in Delaware, where there is a shorter period). The window can also be lengthened (for instance, if you make a payment on the acount). For a rare number of debts, there is no limitations period (i.e., federal student loans). Also remember that the statute of limitations only governs how long the creditor has to file the lawsuit. If/when they receive a judgment on the lawsuit, they could keep that judgment alive for decades.

Other defenses

There are often other defenses that can be raised in collection actions, including challenging the validity of the debt generally, the ownership of the account, improper service of process, whether it was discharged in bankruptcy, identity theft or mistaken identity, and fraudulent charges. You may also have some of your own claims against the debt collector, which could offset or even wipe out their claims.


Oftentimes consumer defendants targeted by debt collection have their own claims against debt collectors based on the collector's own illegal conduct, which may violate the Fair Debt Collection Practices Act (FDCPA), the FDBPA, or other laws. Sometimes, you may not even realize you have such a claim until you have spoken with an attorney. A violation of the federal FDCPA can get you up to $1,000 plus any actual damages you have incurred (including emotional distress), and attorney's fees, that you have incurred. If the FDCPA violation also violates California's Rosenthal FDCPA, you could be entitled up to an additional $1,000. A violation of the FDBPA also gets you up to $1,000, but not if you have also recovered under either of the FDCPA laws. In any event, if you are served with a lawsuit, it is usually worth speaking to an attorney to see if you have any claims that could be asserted against the debt collector.

Responding and other information about process

After you have been served with a lawsuit in a California court, you generally have 30 days to respond. Whether and how to respond is a complex decision. Filing an answer costs money, unless your earnings are sufficiently low that you can ask the court to waive the fees. More information about the mechanics behind responding, and the overall court process is available at the Judicial Branch's website here.

What happens if you lose a lawsuit?

First and foremost, you're not going to jail. Debtor's prisons do not exist anymore. If a debt collector wins a lawsuit against you, then they receive a judgment for a specific amount of money, which will accrue interest at California's 10% postjudgment interest rate. When it comes down to it, a judgment is nothing more than a piece of paper. It is what the debt collector may be able to do with that piece of paper that is the most important. Once they have a judgment, they can attempt to garnish wages, levy bank accounts, or seize other assets. The judgment will also appear in the public record section of your credit report for up to seven (7) years. For some low income individuals without assets, a judgment may not affect you that much - you may be "collection proof." For example, someone whose sole income is Social Security, and has no other property, may be collection proof.

Should you file bankruptcy?

We are often asked this question when someone is facing a lawsuit from a debt collector, and it is a very individualized question. For some people, that may be a good idea, but for others, it may be best to fight off the lawsuits as much as possible. We are happy to walk you through your options.

Settling vs. fighting

Depending on the strength of the debt collector's lawsuit, it

may be best to try and reach a settlement to resolve the matter. Sometimes, it may be more advisable to fight it all the way through trial, or even appeal. The right strategy depends on your risk tolerance, and how much money you may have available for settlement. Usually, it is best to wait until you have obtained some more of their evidence (through the discovery process) before making this strategic decision, so you at least have an idea of how their case looks.

When levy/garnishment can happen

It is important to know that a debt collector cannot garnish your paycheck or levy your bank account without first filing a lawsuit against you, and obtaining a judgment. If they threaten to do so without taking you to court first, then they may be violating the FDCPA.

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