You have been sued by a credit card company — here is what happens next
If a credit card company has filed a lawsuit against you, you will receive official court papers — usually a summons and complaint — either by mail, in person, or through a process server. The complaint states how much the company claims you owe, when the debt originated, and which court has jurisdiction. You have a specific window to respond, usually 20 to 30 days depending on your state, and missing that important date means the company can win by default without a hearing.
The first thing to do is not ignore the papers. A default judgment gives the credit card company a court order to collect the debt, which can lead to wage garnishment, bank account levies, or a lien on your property. Even if you believe you do not owe the money, you must respond in writing to the court within the important date — silence is not a defense.
Key Takeaways
- You must respond to the court within 20 to 30 days of receiving the summons, or the credit card company wins automatically and can garnish your wages or freeze your bank account.
- The credit card company must prove you owe the debt; if they cannot produce the original contract or a clear chain of ownership, you have grounds to challenge the claim.
- You can respond yourself or hire a lawyer; many attorneys offer free consultations and some work on contingency if you have a strong defense.
- Debt settlement or payment plans negotiated before or during the lawsuit can stop the case and prevent judgment against you.
- If you lose, you still have options: payment plans, wage garnishment limits, and the ability to challenge collection tactics that violate federal law.
Understand what the credit card company must prove
The credit card company suing you must show three things: that you had an account with them, that you owe the amount claimed, and that they have the legal right to collect it. Many of these cases are weak on the third point. If the original debt was sold to a debt buyer or passed through multiple collection agencies, the current plaintiff must prove they own the debt through a chain of documents called an assignment. If those documents are missing or unclear, you can file a motion to dismiss.
Ask the court for discovery — the legal process that forces the credit card company to show you their evidence before trial. Request the original signed contract, statements showing the charges and payments you made, and proof that they own the debt. Many credit card companies cannot produce these documents, especially for old debts. If they cannot prove their case, the judge may dismiss the lawsuit.
Even if the debt is real, the credit card company must sue within the statute of limitations for your state. This time limit ranges from three to ten years depending on where you live and the type of debt. If the lawsuit was filed after that window closed, you have a complete defense and should raise it when ready in your response to the court.
File a written response with the court before the important date
Do not call the credit card company or their lawyer to discuss the case. Instead, file a formal written response with the court — called an answer or a motion to dismiss — before your important date expires. You can file it yourself or have a lawyer do it. The response must be typed, signed, and filed with the court clerk, either in person, by mail, or through the court's online system if one exists.
In your response, you can deny the claims, raise defenses (such as the statute of limitations or lack of proof), and request discovery. You can also ask the court to dismiss the case entirely if you believe the credit card company has no legal grounds to sue. If you are unsure what to write, contact your local bar association or legal aid office — many offer free or low-cost help with responses to debt lawsuits.
Keep copies of everything you file and get a receipt or confirmation number from the court. Send a copy of your response to the credit card company's lawyer as well, and keep proof that you did so. Courts require this step, and skipping it can result in your response being rejected.
Decide whether to hire a lawyer or represent yourself
You have the right to represent yourself in small claims court and in many civil lawsuits, but credit card companies almost always have lawyers. A lawyer can file motions to dismiss, request discovery, negotiate a settlement, and represent you at trial. Many consumer attorneys work on contingency — meaning they take payment only if you win or settle — or charge a flat fee for debt defense.
Call your state or local bar association and ask for a referral to a consumer law attorney. Many offer free initial consultations where they can review your case and tell you whether you have a strong defense. If you cannot afford a lawyer, contact your local legal aid office or a nonprofit consumer credit counselor. Some organizations offer free or low-cost representation in debt cases.
If you choose to represent yourself, research your state's civil procedure rules and the specific court's requirements. Court websites often have forms and instructions for people without lawyers. The court clerk can answer procedural questions but cannot give legal information. Be aware that representing yourself is harder than it looks — judges expect you to follow the same rules as lawyers, and mistakes can cost you the case.
Negotiate a settlement or payment plan
At any point before or during the lawsuit, you can contact the credit card company or their lawyer to discuss settling the debt for less than the full amount or arranging a payment plan. Many companies will negotiate because a settlement is faster and more certain than a trial. If you reach an agreement, get it in writing and make sure the settlement agreement says the company will dismiss the lawsuit.
Do not agree to anything you cannot afford. If you settle for $5,000 but can only pay $200 per month, you will fall behind again and face another lawsuit. Be honest about what you can pay, and ask for a payment schedule that fits your budget. Some companies will agree to a lump-sum settlement — paying a smaller amount all at once — if you can borrow the money or receive a tax refund.
If you reach a settlement, the credit card company should file a notice of dismissal with the court. Confirm that this has been done before you make any payments. Once the case is dismissed, the company cannot sue you for that debt again, though the debt may still appear on your credit report.
What happens if you lose the lawsuit
If the judge rules against you, the credit card company receives a judgment — a court order stating you owe the debt. This judgment can be used to garnish your wages, freeze your bank account, or place a lien on your property. However, you still have protections. Federal law limits wage garnishment to 25 percent of your disposable income, and many states have lower limits. Some income — such as Social Security, disability benefits, and unemployment — cannot be garnished at all.
After a judgment, you can still negotiate a payment plan with the credit card company. Many will accept installment payments rather than pursue aggressive collection. You can also file a motion to reconsider or appeal the judgment if you believe the judge made an error or if new evidence has come to light.
If the credit card company tries to collect using illegal tactics — such as calling before 8 a.m. or after 9 p.m., threatening violence, or contacting your employer without permission — you can file a complaint with the Consumer Financial Protection Bureau or sue under the Fair Debt Collection Practices Act. These violations can result in damages paid to you.
Protect yourself from future lawsuits
Once this lawsuit is resolved, take steps to prevent another one. If you have other credit card debts you cannot pay, contact the creditors now to discuss hardship programs, payment plans, or settlements. Many credit card companies have programs for people facing financial difficulty. Do not wait until they sue.
If you receive a summons for any reason in the future, treat it as urgent. Mark your calendar with the response important date and file your answer before that date. Keep records of all payments and communications with creditors. If you are sued again, you will have documentation to support your defense.
Consider working with a nonprofit credit counselor to create a budget and debt repayment plan. These services are often free or low-cost and can help you avoid future lawsuits by addressing the underlying problem — spending more than you earn or facing an unexpected financial crisis.
Frequently Asked Questions
What happens if I ignore the summons and do nothing?
The credit card company wins automatically through a default judgment. The judge will order you to pay the full amount claimed plus court costs and interest. The company can then garnish your wages, freeze your bank account, or place a lien on your home. Ignoring the summons is the worst possible response.
Can the credit card company garnish my Social Security or disability benefits?
No. Federal law protects Social Security, Supplemental Security Income, and most disability benefits from garnishment. However, the credit card company can still obtain a judgment and attempt to freeze other bank accounts or garnish wages from employment. Keep protected benefits in a separate account if possible.
How much will it cost to hire a lawyer for a debt lawsuit?
Many consumer attorneys work on contingency and take no upfront fee. Others charge flat fees ranging from $500 to $2,000 depending on the complexity of your case and your location. Legal aid offices and nonprofit organizations often provide free representation to people who cannot afford a lawyer. Call your local bar association for referrals.
Can I settle the debt for less than what the credit card company is asking?
Yes. Credit card companies often settle for 40 to 60 percent of the claimed amount because a settlement is faster and more certain than a trial. The company may also accept a payment plan. Any settlement must be in writing and should state that the company will dismiss the lawsuit once you pay.
What is the statute of limitations on credit card debt in my state?
The statute of limitations ranges from three to ten years depending on your state and whether the debt is written or oral. Check your state's court website or ask a lawyer. If the credit card company sued after the important date passed, you have a complete defense and should raise it in your response to the court when ready.