Defending a Debt Collection Lawsuit

Do not miss the deadline

The summons states how long you have to respond. Deadlines vary by state and by court, and many fall between 20 and 30 days after service. If you do not respond, the court can enter a default judgment. A judgment can then lead to wage garnishment, bank levies or liens, depending on state law.

Standing and the real party in interest

A plaintiff that bought the debt must show it owns the claim. In federal court, Federal Rule of Civil Procedure 17(a)(1) requires an action to be prosecuted in the name of the real party in interest. However, Rule 17(a)(3) says a court may not dismiss on that ground until it gives a reasonable time for the real party in interest to ratify, join or be substituted. Most states have similar rules, and state courts also apply their own standing rules.

Motion to dismiss or answer?

A pre-answer motion to dismiss tests the complaint as written. For example, it can argue that the complaint does not allege facts showing the plaintiff owns the debt. However, if the motion depends on facts outside the complaint, many courts treat it as a motion for summary judgment, as Federal Rule of Civil Procedure 12(d) does in federal court.

So ownership disputes are often decided later, through discovery, summary judgment or trial. Filing a motion also does not automatically extend every deadline, so check your court’s rules. If you answer, raise all your defenses, including lack of standing and the statute of limitations. Some defenses are waived if you leave them out.

Discovery

In discovery you can ask the plaintiff to produce the documents behind its claim: the original agreement, each bill of sale or assignment, the purchase agreements and the account-level schedules. See proving debt ownership. If the plaintiff cannot produce admissible proof, that gap can matter at summary judgment or trial.

Settlement

Many cases settle. If you settle, get the terms in writing, including the amount, the payment schedule, how the case will be dismissed and how the account will be reported to the credit bureaus.

Debt collection is governed by federal law and state law. State statutes of limitations, licensing rules and court procedures differ, so check your state’s rules and talk to a licensed attorney about an active case.

Researching defending a debt collection lawsuit in your state

First, find the statute or rule that governs defending a debt collection lawsuit where you live. State law controls most of these questions, so the answer can change from one state to the next. Next, read recent decisions from the appellate courts in your state. They show how judges apply the law today. Also, check the local rules of the court that would hear your case. Our state procedures guide links to each state’s official rules. In addition, the Research Center explains how to confirm a source is still good law.

Sources and further reading

Official sources used on this page:

• law.cornell.edu
• law.cornell.edu

Related reading on Lawtopolis:

• Proving Ownership of a Purchased Debt: Chain of Title
• Standing
• Time-Barred Debt and the Statute of Limitations
• How State Court Systems Work