What Happens If I Ignore a Debt Collection Lawsuit?

This article is for educational purposes only and is not legal advice. ProveItToolkit.com is not a law firm and does not represent you. For advice about your specific case, talk to a licensed attorney in your state.

If a lawsuit from a debt collection company just landed in your hands, ignoring it can feel like the safest move. The papers are confusing. The company may be one you have never heard of. Maybe if you do nothing, it goes away.

It does not go away. Here is what actually happens, in plain words.

The case keeps moving without you

A lawsuit starts when a company, called the plaintiff, files papers with a court saying you owe money. You are the defendant, the person being sued. The summons, the official notice telling you that you have been sued, gives you a deadline to respond.

If that deadline passes and the court has heard nothing from you, the plaintiff can ask the court to decide the case without you. When the court agrees, it enters what is called a default judgment. That is a court decision saying you owe the money, entered because you did not respond, not because a judge examined the evidence and found it solid.

Think about what that means. The company suing you can win without its evidence ever being tested. No one makes it stand behind the contract, the account records, or the proof it even owns the debt. Your silence does the work for them.

How long do you have to respond?

The deadline is different in different states, and it can even be different from one court to another inside the same state. So no article on the internet can tell you your deadline. Your summons can. The deadline is printed on the papers you were served with, so read them carefully, and if anything is unclear, the court clerk's office can tell you what deadline applies in that court. What the clerk cannot do is give legal advice.

Why silence is exactly what debt buyers hope for

These lawsuits often come from debt buyers, companies that purchase old unpaid accounts from banks and lenders and then sue to collect. The Federal Trade Commission studied this industry in 2013 and found that debt buyers paid an average of about 4 cents per dollar of the debt's face value, and that they received the actual account documents for only a small fraction of the debts they bought.

Regulators have caught the biggest players cutting corners. In 2015, the Consumer Financial Protection Bureau entered consent orders against Encore Capital Group, the parent company of Midland Credit Management, and against Portfolio Recovery Associates, over practices that included pressing lawsuits based on defective or unsupported paperwork. Both companies were required to pay refunds and penalties and to change how they sue.

A default judgment lets a company win without its paperwork ever being questioned. That is why these cases are filed in volume, and why a response from the defendant changes the picture. Once someone responds, the plaintiff has to be prepared to prove its case, including the chain of title, which is the paper trail showing every sale of the debt from the original lender down to the company suing you.

What a default judgment lets them do

Before a judgment, a debt buyer can only ask you to pay. After a judgment, the court's power is behind them. Depending on your state's laws, a judgment can open the door to wage garnishment, which means money taken directly out of your paycheck, a bank levy, which means money taken from your bank account, and liens, which are legal claims placed against property you own.

Which of these tools is available, how much can be taken, and what income is off limits all vary by state, and federal law sets limits too. Federal law protects Social Security benefits from garnishment for consumer debts like these. An attorney in your state can tell you exactly which protections apply to you.

A judgment is also not a short-term problem. Depending on the state, it can grow with interest over time and can often be renewed, which means it may follow you for many years.

Can a default judgment be undone?

Sometimes. Courts have procedures to set aside, meaning cancel, a default judgment in certain situations, for example when the defendant was never properly served with the lawsuit. But the standards are strict, the time limits vary by state, and winning that fight is harder than responding on time would have been. If a default judgment has already been entered against you, that is a moment to talk to a licensed attorney in your state, and quickly.

The other path

Here is the honest comparison. Ignoring the lawsuit means the company can win without its evidence ever being questioned. Responding means the case gets decided on that evidence, and the FTC's own research shows the paperwork behind purchased debts is often thin.

Responding does not require admitting you owe anything, and it does not mean you have to hire anyone or walk into a courtroom tomorrow. It means the case gets decided on evidence instead of on your silence.

If you want to understand how these cases work before you decide anything, the $47 kit at ProveItToolkit.com walks you through the whole process in plain English, from the summons in your hand to how debt buyers prove, or fail to prove, their cases. Start by picking the company suing you on the homepage at ProveItToolkit.com.

Whatever you do, do not let the deadline on your summons pass in silence. The case will not forget about you, even if you try to forget about it.