How Do Debt Collection Lawsuits Work?

If you fail to pay or get behind on debts owed to a credit card company, medical provider, retail store, student loan holder, or any other creditor, you might be sued. Creditors are likely to sue if you have income or assets they can get a hold of. Don’t panic if you’ve been served with a debt collection lawsuit. We explain what to expect once the lawsuit is filed.

The Complaint

The lawsuit is initiated when a creditor, or more likely their attorney, files a complaint or petition with the court. The complaint will likely list you as the defendant and state why you are being sued and what the creditor is seeking. Usually, creditors want reimbursement for the debt, plus interest.

Service of the Summons & Complaint 

After the lawsuit is filed, you will be served with a copy of the complaint and summons. The summons states that you are being sued, and usually provides additional information such as when you need to file a formal response. Some courts allow creditors to mail the summons and complaint, along with a form for you to sign.

Where the Lawsuit Is Filed

You can be sued in state civil court, sometimes referred to as municipal, superior, or county court. If you owe the federal government money, it will likely take place in federal court. Many states allow creditors to sue in small claims court, depending on the amount owed. In Georgia, the limit for small claims court is $15,000. Not only is the process quicker in small claims court, but the procedures are also more informal than those of a state court.

Your Response to the Lawsuit

You will usually have between 20 and 30 days to file a written response to the lawsuit. It’s important that your response call attention to all possible defenses. This process can be extremely difficult and confusing if you are unfamiliar with debt collection laws. A lawyer can help sort out your defenses, prepare the written response, and represent you in the lawsuit.

What if I Don’t Respond?

If you fail to meet the filing deadline, the court is likely to rule a default judgement. Some courts may award the amount the creditor requests in the default judgment, while other courts will likely review the judgment to ensure the amount is justified. Still, others might ask the creditor to present evidence before awarding any money. 

Have more debt collection questions? Contact our Marietta attorneys to learn more.