Process

• A debt becomes delinquent once you skip a scheduled payment. The problem gets more serious if you continue to ignore the bill. Creditors can write off bad debts, or they can sue you for the money. You are not safe from a lawsuit, even if your bill gets charged off, because the lender can still sell your account to a collection agency that might sue you. You receive a summons once the case is filed, letting you know who is suing you, why and the date and location for court. You are most likely to be sued if you have steady employment and have lived at the same address for a long time, according to Justin Harelik of the Bankrate website.
  
  

Response

• The creditor or collection agency might agree to a settlement before your court case, even if you already received your summons. The case gets dropped when you pay the agreed-upon amount; otherwise, you must attend court. The judge may enter judgment against you, according to Bankrate columnist Steve Bucci. The court can order you to pay the bill, and possibly court costs, within a certain time. Your creditor can take additional steps against you, like garnishing your wages, if you fail to fulfill the judgment terms.
  
  

Limitations

• Collection agencies cannot legally threaten to sue you unless they actually plan to follow through by filing a case. The Fair Debt Collection Practices Act (FDCPA) forbids them from making phony lawsuit threats, claiming that you might face criminal charges or jail time, or making other false or abusive statements. You can file your own lawsuit against collectors who violate the FDCPA and potentially receive monetary damages, according to the FTC.
  
  

Considerations

• Creditors and collection agencies are bound by statute of limitations rules for debt collection. Each state imposes its own time limit on the period in which you can be sued for unpaid accounts, according to the BCS Alliance debt management site. You should not get a summons for a bill that is older than your state's statute of limitations. Unscrupulous debt collectors sometimes file suit even when they are not supposed to, hoping you do not respond. If you ignore the summons, the judge does not know the debt is too old and rules in the collector's favor. Accept the summons, appear in court and ask the judge to dismiss the case because the debt is past the legal time frame.