I am being sued by one of my creditors. What should I do?

Generally, this is the final effort of a creditor seeking to collect on a debt. The creditor will likely make a settlement offer, sometimes for pennies on the dollar. However, these offers usually require lump-sum payment rather quickly. One option is to answer the complaint within the 30-day window you are afforded from the date of service of the summons. Doing so will buy you some time to weigh your options, though collections lawsuits are generally indefensible; if the money was in fact loaned and spent, there isn’t much of a defense. If the amount demanded in the lawsuit is substantial, you may want to consider bankruptcy. If you elect to do nothing, expect an eventual default judgment and wage garnishment, up to 25% of your net income.