Can a debt relief company help after you've been sued for unpaid debt?
Summary
A debt relief company can sometimes help you after a creditor has sued you for unpaid debt by negotiating a lower settlement amount. However, joining a debt relief program does not stop the lawsuit or legal deadlines, so you must still manage the court process separately.Key Facts
- Credit card debt increased by $21 billion in the second quarter of 2026, totaling $1.26 trillion.
- About 4.7% of household debt is currently late or unpaid (delinquent).
- If sued by a creditor, a debt relief company might negotiate a lump-sum payment for less than what you owe, sometimes 30% to 50% less.
- A debt relief program does not stop court deadlines or prevent the creditor from getting a judgment against you.
- If you do not respond to the lawsuit, the court may issue a default judgment requiring you to pay.
- Creditors are not required to accept any settlement offer made by a debt relief company.
- Even if you join a debt relief program, creditors can continue collection actions and lawsuits.
- Managing the debt lawsuit and debt relief negotiation are two separate issues that both need attention.
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