Yes. Debt collectors and collection agencies have the legal right to sue you in court to recover the money you owe . They typically file these lawsuits in civil court or small claims court after other attempts to collect the debt have failed .
How often do debt collectors sue people?
Debt collection lawsuits are extremely common. In 2022, debt collection cases made up 52% of the entire civil court docket in Oregon’s circuit courts—nearly three times the number of eviction cases . Research shows that in Colorado, certain zip codes see dozens of collection lawsuits filed every month, with top filers including companies like Portfolio Recovery Associates, Midland Credit Management, and LVNV Funding .
Who gets sued most often?
Debt collection lawsuits disproportionately affect:
Low- and moderate-income individuals
Black and Latino residents
Residents of rural counties
In Oregon, 75% of people sued for debt make too much money to qualify for legal aid but cannot afford to hire an attorney or pay the debt in full .
What are the most common types of debt that lead to lawsuits?
According to court record analysis, the most common debts that result in lawsuits are:
Credit card debt
Medical debt
Utility debt
Medical debt lawsuits are particularly problematic. One Colorado hospital system and its collection agencies filed 12,722 medical debt lawsuits between 2019-2023, resulting in 8,987 judgments totaling $33.5 million .
Do debt collectors have to prove they own the debt?
Yes. Before a debt collector can sue you, they must prove they actually own the debt or have the legal right to collect it .
If the debt has been sold multiple times (which is common), the collector must provide:
Proof of each assignment or sale (the “chain of title”)
A copy of the original written agreement or contract
Documentation showing the amount owed
If they cannot provide these documents, you may be able to get the case dismissed .
Can debt collectors sue you in their own name?
It depends on the state. Some states allow collection agencies to sue in their own name, which effectively hides the original creditor from the court and the defendant . This means you might not know which company originally claims you owe money.
What happens if I ignore a debt collection lawsuit?
Do not ignore it. If you ignore a lawsuit, the court will likely enter a default judgment against you .
The consequences of a default judgment include:
The collector automatically wins without proving the debt is valid
The court allows the collector to garnish your wages (up to 25% in many states)
The collector can freeze or seize money from your bank account
Additional legal fees and court costs are added to what you owe
Research shows 98.8% of medical debt judgments in one Colorado hospital system were default judgments—meaning patients simply did not show up to court . In Oregon, fewer than 4% of people respond to debt collection lawsuits against them .
How long do I have to respond to a lawsuit?
Generally, you have 20 to 30 days to respond to a court summons . Read your summons carefully—the exact deadline will be stated in the document.
What should I do immediately after being sued?
Step 1: Do not panic
Getting sued is stressful, but you have rights and options . Remember that debt collectors must follow the law, and many lawsuits contain errors .
Step 2: Verify the debt is yours
The Fair Debt Collection Practices Act requires collectors to provide validation information. Write a debt verification letter requesting:
Name of the original creditor
Original debt amount
Date of last payment
Current amount owed
Copy of the original contract
Chain of title (documents showing who owned the debt each time it was sold)
Step 3: Check the statute of limitations
If the statute of limitations in your state has expired, the collector cannot sue you to collect the debt . If they sue you anyway on a time-barred debt, you can raise this as an affirmative defense to get the case dismissed.
Step 4: Respond in writing
You must file a formal response (called an “answer”) with the court by the deadline. This does not mean you admit the debt—it simply means you are participating in the case .
Can I settle the debt instead of going to court?
Yes. Many debt collectors prefer to settle rather than go to court . Options include:
| Settlement Option | Description |
|---|---|
| Payment plan | Negotiate monthly payments you can afford |
| Lump-sum settlement | Offer to pay a portion of the debt (often 30-50%) in exchange for the collector dropping the lawsuit |
| Get it in writing | Always obtain written confirmation that the debt is “paid in full” before making payment |
How do I negotiate with a debt collector?
Be polite but firm – Lawyers and collectors are more flexible with people who are respectful
Don’t admit the debt – Never say “this is my debt” during negotiations, as this could restart the statute of limitations
Know your situation – If you receive Social Security, disability, or other protected benefits, tell them you are “collection proof”
Document everything – Write down names, dates, and what was discussed
Hang up if needed – If a collector becomes abusive, end the call and try again later with someone else
Do I need a lawyer?
Not necessarily, but it helps. You have the right to represent yourself in debt collection cases . However, an attorney can:
Help you understand your legal options
Identify errors in the collector’s case
Negotiate settlements on your behalf
Represent you in court
If you cannot afford a lawyer, you may qualify for free or reduced-fee legal aid . Additionally, if the debt collector violated the law, the court may order them to pay your attorney’s fees .
What are my defenses against a debt collection lawsuit?
You may be able to get the case dismissed if:
The statute of limitations has expired
The collector cannot prove they own the debt (lack of standing)
The debt is not yours (mistaken identity or identity theft)
The collector engaged in illegal practices
Can I countersue a debt collector?
Yes. If the debt collector violated the Fair Debt Collection Practices Act (FDCPA) by:
Harassing or threatening you
Using false or deceptive means to collect
Lying about being a lawyer
Suing on a time-barred debt
Contacting you after you requested they stop
You may be able to file a counterclaim and recover damages, including up to $1,000 in statutory damages plus actual damages and attorney’s fees .
What happens if I lose the lawsuit?
If the court rules against you, the collector receives a judgment. This judgment can remain enforceable for many years (up to 20 years in some states) and allows the collector to:
Garnish up to 25% of your wages
Seize funds from your bank account
Place liens on your property
What if I am “collection proof”?
If your income comes from protected sources (Social Security, disability, unemployment, veterans benefits, child support) or you have no assets or disposable income, you may be “collection proof” . This means the collector cannot collect from you even if they win the lawsuit. You should still respond to the lawsuit and inform the court of your situation.
Where can I report illegal collection practices?
File complaints with:
(CFPB) – PO Box 27170, Washington, DC 20038
Federal Trade Commission (FTC) – 1-877-FTC-HELP or ReportFraud.ftc.gov
Your state Attorney General’s office