When you receive a court summons informing you that a collection agency has filed a civil lawsuit against you for an old, unpaid debt, don't throw that summons away. If you do not respond to the lawsuit within the time period mandated in your county – usually approximately 20 days – the collection agency will automatically win the lawsuit and you could face some frightening consequences.

Consequences of a Civil Judgment

A civil judgment gives any creditor special collection rights. This can result in your assets being seized against your will. After a debt collector wins its lawsuit in court, you may open the mail one day to discover a wage garnishment order or that your bank account is being frozen. You may even be unable to sell or refinance your home until you pay off a property lien against you home courtesy of – guess who? The collection agency and its civil judgment.

A few states, such as South Carolina, do not allow collection agencies to use involuntary collection methods following a lawsuit and a civil judgment. Most states, however, permit aggressive collection after a lawsuit.

Judgments By Default

In many cases, collection agencies aren't able to actually prove their cases against each debtor in court. All they have is a name, a debt and some personal information. When pressed, they aren't able to provide copies of any contracts or documents proving that the individual being sued actually owes them a dime.

Fortunately for debt collectors, most consumers do not realize this. They are so frightened of the debt collection lawsuit that they toss the court summons into the garbage and refuse to acknowledge the danger they are in. When the court receives no response from the defendant and the individual doesn't show up at the hearing, the judge has no choice but to grant the collection agency a judgment by default.

Fighting Collection Lawsuits

Even if you owe the debt in question, that doesn't necessarily mean that the agency will win its lawsuit against you. Responding shows debt collectors that you are ready and willing to duke it out in court. In essence, you're calling the collection agency's bluff. If the company has no information to prove you owe the debt, it may wait until the last minute to drop the lawsuit against you or never drop it at all and just fail to appear in court. If you are a judgment proof debtor, notifying the collection agency of this will sometimes also result in a win on your end since, even if it wins, the company has little hope of ever collecting the debt from you.