If you have been sued over a debt you genuinely cannot pay, the fear is real, but so is this: a lawsuit is not the same as a judgment, and being unable to pay does not mean you have to give up. What you do in the next few weeks matters more than the size of the debt.
Respond anyway, even if you cannot pay. The single worst outcome is a default judgment, which happens when you do nothing. A judgment can lead to wage garnishment or a bank levy. Responding keeps your options open and forces the other side to prove its case. You can respond for free, and you do not need any money to do it.
Your options when money is tight
- Make them prove the debt. Especially with a debt buyer, the case can weaken or fall apart if they cannot prove they own your account or document the amount. Responding is how you make them try.
- Force arbitration if your agreement allows it. This can make a small-balance case cost more for them to pursue than it is worth, which sometimes ends it. It costs you nothing to raise.
- Settle for less. Many creditors will accept a reduced lump sum or a small payment plan, especially once you have responded. You may be able to resolve the case for a fraction of the claim.
- Get free help. Legal-aid organizations and nonprofit credit counselors help people in exactly your situation, often at no cost. You do not have to face this alone.
- Bankruptcy, as a last resort. For some people with overwhelming debt, bankruptcy is a legitimate fresh start that can stop collection. It is a serious step best discussed with a bankruptcy attorney, many of whom offer free consultations.
Some of your income and property may be protected
Even if a creditor eventually wins, not everything can be taken. Certain income, such as Social Security, disability, and some other benefits, is often protected from garnishment, and states set limits on how much of a paycheck can be taken. The exact protections vary by state, so it is worth learning what applies where you live.
Where to find free help
Search for "legal aid" plus your county or state, contact your local bar association's lawyer referral service, or look for a nonprofit credit counseling agency. Many will review your situation for free and can point you to the right next step.
Respond for free (no money needed) →
Learn how settling works →
See also: the step-by-step roadmap and the debt lawsuit FAQ.
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Not a lawyer. Not a law firm. Not legal or financial advice. ARBITRATE is an educational self-help platform providing general information only. Nothing here creates an attorney-client relationship, and nobody here can tell you what to do in your specific case. Protections, procedures, and rights vary by state and can change. Read your own court papers, and if you can, consult a licensed attorney in your state. Many legal-aid organizations help with debt cases for free or at low cost.