Sued over a debt in small claims court: what to do

If you were served with papers that say small claims, a creditor or debt collector has asked a court to order you to pay. Small claims is part of your state's court system, and its rules come from your state and your local court: the largest amount a case there can be for, how you answer, and how long you have. This page does not list them. Your papers and your court's own website say what applies to you, and USA.gov explains how to find a county or municipal court through your state's court website. Check your state.

The deadline on the papers

The papers tell you what to do and give you the deadlines. Depending on the court, responding can mean filing a written response, showing up on the date the papers give, or both. The FTC says the most important thing is to respond, even if you think you do not owe the debt. Responding does not mean you agree that you owe it or that it is valid.

Show up, or risk a default judgment

If you never respond or appear, the case can go ahead without you. The court can rule without hearing your side, and the collector can win by default. The CFPB calls this a default judgment, and notes that a judgment is a court order that can be very difficult to change or set aside once the case is over.

Make the collector prove the debt

The collector has to prove to the court that the debt is valid. The FTC lists what it must show:

• that you are the person who owes the debt;
• that the amount is correct, including any interest or fees;
• that you owe it to them rather than someone else, and that they have the legal right to sue you.

The last point matters when a debt has been sold to a new owner. Bring what you have: the validation information collectors must send you (see how to make a debt collector prove the debt), letters, statements, and proof of any payment you made.

Is the debt too old to sue on?

A debt past the time limit for a lawsuit is called time-barred, and under the Debt Collection Rule a collector must not sue or threaten to sue on one. The CFPB says it is ordinarily the responsibility of the person being sued to point out that the limit has expired. The FTC's advice: show up on the day of your case, tell the court the debt is time-barred, and bring a copy of the debt information from the collector. A partial payment, or admitting you owe an old debt, may restart the time period, so read the statute of limitations before you pay anything on it.

Settling before the court rules

The CFPB says you may be able to work out a compromise or settlement with the collector before a judgment, and the FTC notes that some collectors would rather settle than go through a long lawsuit. If you agree to a plan, get it and the collector's promises in writing before you make a payment. If the collector accepts less than the balance, the forgiven part may be taxable; see settled debt and taxes.

If a judgment is entered

A judgment lets a collector use stronger tools. The CFPB says it can allow garnishment of wages or bank accounts, or a lien on your home, and you may be ordered to pay collection costs, interest or attorney fees. Federal law caps how much of a paycheck can be taken for most debts (see wage garnishment limits). The FTC says many federal benefits, such as Social Security, Supplemental Security Income and veterans benefits, are generally exempt from court-ordered garnishment, except for debts like delinquent taxes, child or spousal support, and student loans. The CFPB's advice is to contact a lawyer if a judgment has already been entered.

Getting help

• Legal aid. Legal aid offices and clinics offer free help if you meet their criteria. The Legal Services Corporation's search finds an organization near you.
• A lawyer. Some attorneys offer free or reduced-fee help. Ask whether they handle consumer law, debt collection defense, or the Fair Debt Collection Practices Act.
• A claim of your own. If the collector broke the collection rules, a lawsuit under that Act must be filed within one year of the violation. See your rights when a collector calls.

This page is general information, not legal advice. Your papers and your state's court rules control your case.