Behind the litany of aggressive telephone calls and collection letters lurks a much darker threat – a debt collection lawsuit. While not all collection agencies sue for bad debts, some do so as a matter of policy. Others file suit only against consumers who owe particularly high debts. If a collection agency sues you, failing to answer the lawsuit and defend yourself in court will result in a default judgment from the collection agency that could leave you facing a wage garnishment order, a bank levy or even a lien against your home.


Check the Statute of Limitations

In an effort to protect consumers, each state maintains regulations regarding how long a debt collector has to file suit against an individual for an unpaid debt. This time frame is the statute of limitations for debt collection.

The statute of limitation for debt collection lawsuits begins exactly 180 days from the last payment the debtor made on the account. Each state’s statute of limitations varies but, once the statute of limitations expires, all future creditors for the debt lose the right to recover it via a lawsuit.

While a debt collector cannot legally sue you after the statute of limitations in your state expires, not all collection agencies adhere to laws intended to protect consumers from abusive debt collection practices. If the statute of limitations on a debt has already expired, you can use it as an affirmative defense against the collector in court.


Answer the Collection Summons

When you receive a court summons from a collection agency, ignoring the summons is the worst thing you can do. You have a limited period of time to answer the summons and state a defense. If you fail to do these things, the judge will grant the collection agency a default judgment. It’s much more difficult to overturn a default judgment than it is to prevent one.

The summons arrives with a complaint attached. Review the complaint and respond to the company’s claims by noting whether you agree or disagree with each allegation against you. If you plan to use a specific defense in court, such as claiming the statute of limitations has already expired, note this fact on the summons. Return your answer to the court within the allotted time frame for doing so in your state of residence.


Demand Proof From the Collector

If you don’t show up in court, the collection agency doesn’t have to prove its case to the judge. The court assumes that you agree with the company’s allegations and have voluntarily forfeited your right to a defense by not appearing in court. When you answer the summons and show up at the legal hearing, however, the debt collector must prove its claims to the court.

Many collection agencies purchase debt packages from creditors that contain little information about the debtor or the original account other than the debtor‘s name and how much he owes. This makes it difficult to prove that the individual is actually responsible for the debt should the case go to court. Because the collection agency doesn’t want to face the expense of a lawsuit when it could potentially lose the case, some debt collectors will drop a lawsuit after you answer the company’s summons and state your intentions to defend yourself in court.