If a creditor sues you for a credit card debt you did not pay, you will receive a formal summons notifying you of the lawsuit. The summons will include evidence of the complaint lodged against you, as well as the date and time of the hearing. If you don’t appear in court, the court will award your creditor a default judgment. In most states, this gives the creditor permission to garnishee your wages and bank accounts. If you appear in court and lose the case, however, the creditor will also receive a judgment against you. Depending on your circumstances, you may have various options to avoid appearing in court.
Respond to the court summons and state your lack of assets. If your only income is exempt from garnishment, such as public assistance or a retirement pension, and you do not own any property, make this clear in your response. If you do not have assets the creditor can garnishee and do not own property the creditor can file a lien against, proceeding with the lawsuit is a waste of both time and money for the creditor. Many creditors will drop their suits after receiving notice that a debtor is “judgment-proof.”
File for bankruptcy. Regardless of whether you file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code, an automatic stay goes into effect that protects you from collection activity. A creditor cannot legally proceed with its lawsuit after you file for bankruptcy.
Contact your creditor’s attorney and offer to pay the debt in full. If you pay off what you owe after receiving the summons, your creditor has no reason to proceed with its lawsuit against you.
Contact your creditor’s attorney and negotiate a payment plan. While a creditor with a pending lawsuit against you is not legally required to accept payments on the debt, many will work with you and drop the case.
Respond to the court summons with a solid defense. If, for example, the statute of limitations for debt collection in your state has expired, the creditor cannot win a judgment against you in court. If you respond to the summons with a solid defense, the creditor has little choice but to drop its lawsuit.
You are not required to appear in court to defend yourself against a lawsuit, and you will not be arrested if you do not show up.
Filing for bankruptcy severely damages your credit rating.
- Neighborhood Economic Development Advocacy Project: The Basics of Defending Creditor Lawsuits
- Nolo: How Bankruptcy Stops Your Creditors – The Automatic Stay
- MSN Money: Is There a Statute of Limitations on Debt?
- Consumer Financial Protection Bureau. "What Is a Garnishment?" Accessed June 8, 2020.
- Federal Student Aid. "Collections." Accessed June 8, 2020.
- Nolo. "How to Object to a Wage Garnishment." Accessed June 8, 2020.
- Federal Trade Commission. "Debt Collection FAQs." Accessed June 8, 2020.
- Federal Trade Commission. "Settling Credit Card Debt." Accessed June 8, 2020.
- Justia. "Wage Garnishment and Bankruptcy." Accessed June 8, 2020.
- You are not required to appear in court to defend yourself against a lawsuit, and you will not be arrested if you do not show up.
- Filing for bankruptcy severely damages your credit rating.
Ciele Edwards holds a Bachelor of Arts in English and has been a consumer advocate and credit specialist for more than 10 years. She currently works in the real-estate industry as a consumer credit and debt specialist. Edwards has experience working with collections, liens, judgments, bankruptcies, loans and credit law.