How to Get a Debt Lawsuit Dismissed: Steps and Advice

How to get a debt lawsuit dismissed is a common question for anyone facing legal action over unpaid debts. While it can feel overwhelming, understanding your rights and building a strong defense can make all the difference. 

Hi, Joe here—your trusted credit specialist!

Today, let’s talk about what happens if a debt collector sues you. Answering a big question: Can a debt lawsuit be dropped? Even more important, what can you do if this happens to you?

The short answer is YES, but with the right approach. In fact, many individuals are surprised to learn that the debt lawsuit dismissal success rate in some cases reaching as high as 50-60%.

Recently, a client of ours successfully got their debt lawsuit dismissed, and I want to share their experience to help you be better prepared if you ever find yourself in a similar situation.

What Happens When a Debt Collector Sues You?

When a company decides to take legal action, their lawyers will typically send you a notification in the mail. This includes:

• All the documentation they submitted to the court
• An explanation of who they are and what they’re suing you for
• The date and location of your court appearance

Sometimes, people never receive this notice because the debt collectors only have an old address on file. Unfortunately, that doesn’t mean the case is dismissed. If that’s the only way they can reach you, the court will still accept it as a valid notification. If you don’t show up to court, the creditor may be granted a default judgment, which means they win the case automatically.

Many people don’t even know they’ve been sued until they receive a wage garnishment notice. This means the debt collector is now taking money from their paycheck. How much they can take depends on state laws. However, federal law states they can’t take more than 25% of your wages or 40 times the federal minimum hourly wage, whichever is less.

How Do I Defend Myself in a Debt Lawsuit?

If you want to beat a debt collector in court, you’ll need to take the right steps to prepare yourself. Stay calm, think carefully, and consider consulting with professionals. Keep in mind that a lawsuit is typically the last action a debt collector, such as Boneville Collections, ARS National, or CCS, will take.

If you want your debt collection lawsuit dismissed, here's what you need to know:

Understanding the Statute of Limitations 

The first thing you need to understand is the statute of limitations, which determines how long a company has to sue you for a debt. This timeframe varies state by state and is based on the state where you originally signed the contract or incurred the debt. Generally, the statute of limitations can range from 3 to 10 years, depending on the specific type of debt and state laws.

For example, if you lived in Florida when you opened a credit card but later moved to Mississippi, the statute of limitations from Florida still applies, even if the lawsuit is filed in Mississippi. The original state where the agreement was made governs the timeline.

Once the statute of limitations expires, the debt becomes “time-barred," meaning a creditor cannot legally sue you to collect it. However, this doesn’t mean the debt disappears—it can still exist on your credit report or prompt collection attempts. As long as the statute of limitations hasn’t expired, a company has the legal right to pursue you for unpaid debts.

If you receive a court notice, don’t panic or rush to pay the debt immediately. It’s important to verify the debt and ensure it’s within the statute of limitations. The creditor or debt collector is required to prove that you owe the debt and that their lawsuit is filed within the appropriate timeframe.

Always consider consulting with a legal expert to understand your rights fully.

Know What to Do If You Receive a Court Notice

If you receive a notification that you’re being sued, don’t ignore it. You should always show up in court, even if you reach out to the company to discuss the debt. The only time you don’t need to go is if the court itself tells you that you don’t have to appear.

The first thing you should do is contact the court clerk’s office and provide the case number to verify that the lawsuit is real. If they don’t have a record of it, it could be a scam designed to scare you into paying a fake debt. If they do have it on record, confirm the court date and the company that’s suing you.

At this point, you have two options:

1. Contact the company and try to negotiate a settlement or set up a payment plan.
2. Fight the case in court, which we will be discussing later on.

Recommended Read: What To Do If You Have Been Sued By Debt Collectors

Respond to the Lawsuit

After receiving a court notice and verifying that it’s real, you need to take action by responding. Ignoring it can lead to a default judgment against you, meaning the court will automatically rule in favor of the creditor.

To protect yourself, you must file a written response, also known as an "Answer," with the court within the timeframe specified in the summons (typically 20-30 days, depending on your state).

In your response, you can: 

1. Admit or Deny the Claims: Carefully review the claims in the lawsuit and either admit or deny each one. Deny any claims you believe are inaccurate or unproven. 
2. Assert Your Defenses: Raise legal defenses, such as the statute of limitations, incorrect debt amount, mistaken identity, or the debt collector’s lack of legal authority to sue (e.g., no proof of ownership of the debt). 
3. Request Proof: Ask the creditor to provide documentation, such as the original contract, account statements, or proof of their authority to collect the debt. This is known as "demanding validation." 
4. File a Motion to Dismiss: If you believe there are significant legal issues, such as improper service, lack of jurisdiction, or failure to provide sufficient evidence, you can file a Motion to Dismiss to challenge the validity of the lawsuit before proceeding further.

Challenge the Creditor’s Evidence 

Debt collectors are required to prove that you owe the debt, that the amount is accurate, and that they are legally entitled to collect it. In many cases, they lack the proper documentation to back up their claims.

This is where you should focus. Our experience with numerous debt collection cases shows that credit reports or debt claims often contain deeper errors in credit reports or debt claims than you might expect. You can even challenge something as simple as an incorrect interest rate. 

Here's how you can strengthen your case: 

• Requesting a chain of custody for the debt, showing how it was transferred from the original creditor to the current collector. 
• Examining whether their lawsuit contains errors, such as incorrect amounts, dates, or your personal information. 
• Confirming that they filed the lawsuit within the proper jurisdiction and within the statute of limitations. 

If the creditor cannot provide sufficient evidence, the court may dismiss the case.

Consider Negotiation or Settlement 

If the debt is valid and the creditor provides sufficient proof, consider negotiating a settlement. Creditors often accept reduced amounts to avoid litigation costs. They may evaluate your repayment capacity and offer a more manageable payment plan, such as flexible installments or temporary adjustments based on your financial situation. This approach allows creditors to recover part of the owed amount without the time and expense of legal action. While settling a debt won’t prevent credit score damage, it can help you avoid wage garnishment and provide a clearer path to financial stability.

Pro Tip: Always document agreements in writing to avoid misunderstandings and protect yourself.

By following these steps, you can greatly increase your debt lawsuit dismissal success rate and enjoy lasting peace of mind.

Debt Collection Lawsuit Frequently Asked Questions

Before we close this topic, let’s address some additional questions related to debt collection lawsuits.

How do I clear my debt in settlement?

To clear your debt through a settlement, start by reaching out to the creditor or collection agency to propose your offer. Be honest about what you can afford and explain your financial situation. Once both parties agree on a reduced amount, ensure you have the settlement terms documented in writing. 

This should include the agreed payment amount, due dates, and confirmation that the debt will be reported as “paid in full" or “settled" to credit bureaus once the payment is complete. After making the payment, request a confirmation letter for your records to ensure the account is closed as agreed.

What percentage should I offer to settle a debt?

The percentage you offer depends on your financial situation and the creditor’s willingness to negotiate. Typically, settlements range between 30% to 70% of the total debt owed. Start with a lower offer, such as 30% to 40%, and be prepared to negotiate. Creditors often prefer to recover a portion of the debt rather than risk getting nothing if the debt remains unpaid.

If you're unsure how to proceed at any stage, consulting with a lawyer or a debt specialist can help you navigate the process and determine the best course of action.

How can I avoid wage garnishment?

To avoid missing important court notices, I always advise people to:

• Set up mail forwarding for any previous addresses where they might have outstanding debts.
• Check court records online to see if any lawsuits have been filed against them. Many states have free case search websites where you can look up your name to see if you have an open case.

Additionally, it’s important to communicate with creditors directly. If you’re aware of outstanding debts, consider negotiating a repayment plan before a lawsuit is filed. Staying proactive by monitoring your credit report regularly can also help you spot potential issues early.

How can a FDCPA Violation strengthen your case?

Under the Fair Debt Collection Practices Act, when a debt collector purchases a debt, they have five days to send you a debt notification. This letter must include:

• The original creditor’s name
• The total debt amount
• How to contact them for payment
• A statement saying you have 30 days to dispute the debt

If you never received this letter and had active mail forwarding, they may have violated the FDCPA. A court notice cannot serve as a debt notification, which could put them in hot water.

Can a Debt Lawsuit be Dismissed?

Absolutely, it’s possible! With the right strategy, you can dispute a debt and even have the case dismissed entirely.

Here's a real-life success story from one of our clients:

*"On my final court date, I arrived fully prepared and ready to defend my case. Before the hearing, the opposing lawyer—newly assigned and unfamiliar with the details—asked to meet in a conference room. While I wasn’t obligated to share anything, I calmly and confidently explained my side of the story.

As we talked, a critical flaw in their case became clear: the debt collector didn’t have the proper documentation to prove the debt was legitimate. Realizing their argument was weak, the lawyer filed a motion to dismiss the case. The judge reviewed it and agreed."*

The lawsuit was dismissed, the debt was eliminated, and within 45 business days, it was completely removed from her credit report.

This story demonstrates that with preparation, determination, and the confidence to stand your ground, you can successfully challenge a debt lawsuit and achieve a favorable outcome.

Final Thoughts: How to Dispute a Debt 

Disputing a debt can feel tough, but you can do it!

The worst case scenario in a lawsuit like this is that you have to pay the debt. The best case scenario is that the case is dismissed, and the debt is removed from your credit report. Either way, it’s worth fighting because the burden of proof is on the debt collector, not you.

If they can’t prove that you owe the debt, then you don’t have to pay it. If you receive a court notice, don’t assume you’ve automatically lost. You have the right to fight back and demand proof.

I’m not a consumer lawyer, so I can’t give legal advice, but if you have questions about your debt collection case or how judgments affect your credit, contact us at https://asapcreditrepairusa.com/.

If you’ve been sued by a debt collector, what did you do? Share your experience below!