Debt Collectors Are Suing More and More Americans — What To Do If You're Served
Like your groceries, rent and bills, debt itself is getting more expensive. Not only that, debt is getting more litigious, as well. As inflation continues to squeeze household budgets and Americans rack up record levels of consumer debt to cover everyday expenses, debt collectors are now taking more people to court than they have in years.
According to a new report from The Pew Research Center, debt collection lawsuits began to surge in 2025, with filings climbing far above pre-pandemic levels in many states. For many, that means many of us are at risk of finding something far more intimidating than an overdue bill when we open the mailbox: a court summons.
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If that happens to you, it’s important not to panic — but it’s just as important not to ignore it. Being served with a debt collection lawsuit doesn’t automatically mean the collector will win, and there are steps you can take to protect your rights and avoid making an already difficult situation even worse.
Here’s what experts say you should do if you’re served with a debt collection lawsuit.
Why You? Why Now?
“We’ve noticed a real uptick in these lawsuits over the last several months, often for lower balances than we’d seen previously, sometimes for just a few hundred dollars,” said Michael McAuliffe, president and founder of Family Credit Management, a national nonprofit debt management and counseling organization.
So, why might you find yourself being sued for what seems a paltry amount?
“It’s often not the original credit card company," McAuliffe said, "but a third-party collector they’ve either placed the debt with or sold it to, sometimes more than once by the time the lawsuit shows up. Some firms use lawsuits as part of their standard collection arsenal.”
Don’t Ignore a Summons — Respond to It
McAuliffe said that the primary mistake people make when receiving a summons is ignoring it out of fear and hoping it will be forgotten.
“Receiving a summons is overwhelming and upsetting,” he said, “but if you don’t respond by the deadline, often 20-30 days, the court will almost always rule against you automatically. Once a default judgment is entered, the creditor has more extreme, but completely legal, tools to collect like wage garnishment, a bank levy or even a lien against property in some cases.”
Even a simple written response (your summons will have instructions on how to do so), gives you a chance to avoid these scary eventualities.
Confirm Your Debt
Before you do anything else, verify your debt as soon as you receive notification of the lawsuit. Confirm the amount is accurate, and that the debt indeed is yours.
McAuliffe said that occasionally, unethical collectors will also sue you after a state’s limitations have expired, so you need to double-check the laws in your state to make sure the lawsuit is actually valid.
Once You Reach Out, You Have Options
If your debt is confirmed, you will need to move quickly to explore your options.
“You can reach out to a certified nonprofit credit counseling agency to discuss repayment options,” McAuliffe said, “but remember that contacting a counselor does not pause the lawsuit and doesn’t mean you don’t need to respond. But the good news is, even after a lawsuit is filed, some creditors will still be open to negotiation a repayment agreement or settlement, but the longer you wait, the harder this becomes.”
A lawsuit can be frightening, but many creditors will work with you if you show a willingness to communicate and cooperate. Responding quickly and responsibly is key, and likely your best chance for a settlement.
The Bottom Line
A lawsuit does not ensure the worst-case scenario, but ignoring the summons will. Act smart and act fast to stay ahead.
“To keep yourself from getting overwhelmed and avoiding the situation all together, just remember, a lawsuit isn’t the end of the world, it just means you need to stay calm and take action,” McAuliffe said. “The earlier you act, the more options you have and the more control you can take.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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