Sued by a Debt Collector? Read This Before You Do Anything.
Debt buyers count on you not showing up. The questions below cover what actually happens after you're served in Arkansas or New Mexico — and the defenses and counterclaims that have made collectors drop cases.
Talk to a lawyer, free. Every case starts with a free debt analysis by phone or video — we look at your whole situation and tell you the truth, even if the answer is “do nothing.”
I just got served with a debt collection lawsuit. What do I do first?
Read the summons and note the deadline to respond — depending on the court it's often only 20 to 30 days, and the clock is already running. Do not call the collector's law firm to “work something out” before you understand your defenses; anything you admit can be used against you. Get the paperwork in front of a lawyer fast — this office reviews collection lawsuits in Arkansas and New Mexico for free.
What happens if I just ignore the lawsuit?
The collector wins automatically by default judgment — no trial, no proof tested. With a judgment they can garnish wages (federal law allows up to 25% of disposable pay in most cases), freeze and levy bank accounts, and place liens on property. Most collection lawsuits end exactly this way because the person never responds. Ignoring it is the one move that guarantees you lose.
Can I actually beat a debt buyer lawsuit?
Often, yes. Debt buyers purchase old accounts for pennies on the dollar, frequently with incomplete records. To win a contested case they must prove they own your specific debt (the full chain of title from the original creditor) and prove the amount with admissible evidence. When a defendant shows up with a lawyer and demands that proof, cases routinely get dismissed or settled for a fraction — this office has had collectors drop lawsuits entirely.
What is the FDCPA, and can I countersue a debt collector?
The federal Fair Debt Collection Practices Act regulates how collectors can behave — and it has teeth. Violations (false statements, suing on the wrong amount, harassment, threats, calling after you're represented) can support a counterclaim for statutory damages up to $1,000 plus your actual damages and your attorney fees. A live counterclaim changes the economics of the collector's case: suddenly they can lose money by suing you. It's one of the main reasons collectors drop cases.
What if the debt is too old? (Statute of limitations)
Every debt has a statute of limitations, and collectors do sue on debt that's already time-barred — it's a complete defense if you raise it, but the court won't raise it for you. The limitations period depends on the state and the kind of debt, and be careful: in some situations a partial payment or written acknowledgment can restart the clock. Before paying anything on an old debt, have a lawyer check whether it's even enforceable.
What does it mean to be 'judgment proof'?
If your income and property are legally protected from collection, a judgment against you may be uncollectible — there's simply nothing the law lets the collector take. Social Security, VA benefits, disability, and certain wages and property are exempt. For some people the honest legal advice is: don't pay, don't settle, don't file bankruptcy — you're protected. That's a real outcome of the free analysis, and it's why it pays to ask before paying anyone.
Can they garnish my wages or bank account?
Generally only after they win a judgment — which is why responding to the lawsuit matters so much. After judgment, wage garnishment is capped by federal law (typically 25% of disposable earnings, less if your pay is low), and exempt funds like Social Security generally can't be touched even in a bank account. Before judgment, threats to garnish you are often FDCPA violations in themselves.
Should I just settle the debt?
Sometimes — but from a position of strength, not fear. Settlements negotiated after a defense appears are routinely far below the face amount, paid as a single lump sum, with the lawsuit dismissed. Always get the deal in writing before paying, and know that forgiven debt can generate a 1099-C tax form — part of why the right settlement strategy is a legal question, not just a haggle.
Will filing bankruptcy stop the collection lawsuit?
Yes, immediately — filing triggers the automatic stay, which freezes the lawsuit, any garnishment, and all collection activity the moment the case is filed. If you have several debts beyond the one lawsuit, bankruptcy can be the cleaner answer: one filing handles all of them. The lawsuit-defense and bankruptcy options get weighed side by side in the free analysis. See the Arkansas bankruptcy FAQ and New Mexico bankruptcy FAQ on this site for what filing involves.
What if the debt isn't mine, the amount is wrong, or it's identity theft?
You can demand validation and make them prove it. Collectors must verify the debt when you dispute it, and suing on a debt that isn't yours or inflating the balance can violate the FDCPA. Identity-theft debts have additional protections under federal law. Bring every letter and the lawsuit papers to the consultation — mistaken identity and bad balances are more common in debt-buyer files than people expect.
Collectors are calling me constantly. Is that legal?
There are hard limits. Collectors generally can't call before 8 a.m. or after 9 p.m., can't harass or threaten you, can't discuss your debt with most third parties, can't lie about what they can do to you, and must stop calling you at work if told. Once you're represented by a lawyer, they're required to talk to the lawyer instead of you — which is, for many clients, the first good night of sleep in months. Violations feed straight into an FDCPA counterclaim.
How much does it cost to fight a debt collection lawsuit?
It starts free — the debt analysis costs nothing and ends with a straight recommendation: defend, settle, file bankruptcy, or safely do nothing. If we defend, fees are flat and in writing before you commit. And because the FDCPA shifts attorney fees to the collector when they've violated it, in some cases the collector effectively funds your defense. We represent people only — never debt buyers, collectors, or commercial lenders.
Ready for a straight answer? Asa King is a licensed attorney (Arkansas & New Mexico, admitted to the 8th Circuit and the U.S. Supreme Court) who represents people — never debt collectors or debt buyers. Consultations are by phone or video, statewide.
This page is general legal information for Arkansas and New Mexico, not legal advice about your specific situation. Laws, court fees, and exemption amounts change. For advice you can rely on, speak with a licensed attorney. Attorney advertising.