What to Do When Sued by a Creditor: Essential Tips

Being sued by a credit card company can be stressful, but understanding the process can help you get through these difficult times. In this video, I’ll go through the steps you need to know to make the best decision. I’ll discuss what to do if you’re facing a lawsuit from a creditor, including the mediation process. Here’s a summary of what this video focuses on:

Before the Lawsuit is Filed

The credit card company or creditor will contact you to arrange payments. Negotiation and settlement are possible at this stage. The original creditor usually sells the debt to a debt collection agency, so you will not likely remember or recognize the debt when initially contacted. But always confirm the debt is yours by asking for proof of the debt.

The debt collection agency will try to collect the debt through phone calls, emails, and letters. Sometimes, the debt can be settled for a lower amount at this stage. If there’s no agreement, then the lawsuit is filed.

The Lawsuit Process

The first step in a lawsuit is to get served: A process server will deliver court documents to you or someone at your residence. Generally, a private process server might be used or the Sheriff’s Office. Not that the Sheriff’s Officer is only there to serve (hand you) the lawsuit.

Responding to the Lawsuit

Read the summons carefully. You have limited time (usually 20-30 days) to file a response with the court clerk’s office. Sending a letter to the judge is not a valid legal response. Forms or templates are often available online for free from the clerk’s office where the case was filed. The clerk’s office will normally have samples on how to respond to the petition, including self-help programs.

Mediation

A mediation conference might be scheduled to try and settle the case. At this point, both sides provided each other with relevant documents through what is known as the discovery phase. If there is no agreement at mediation or a pre-trial conference, then the case proceeds to trial.

If the creditor wins at trial and gets a judgment, the creditor can take steps to collect the money owed, including wage garnishment, bank account freezing, or liens on the property. At this point, it may be necessary to file for bankruptcy.

Important Tips to Consider

Don’t Ignore the Lawsuit! Ignoring it will result in a default judgment against you, making collection much easier for the creditor. With a default judgment, the court will grant what the creditor requested in their lawsuit.

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Remember, this is a general overview and does not constitute legal advice. Always make sure to consult with a local experienced lawyer.

Updated March 13, 2025.