Debt Collection / Minimum Amount A Debt Collection Agency Would Sue For

What Is The Minimum Amount A Debt Collection Agency Would Sue For?

Written by Ben Tejes
Updated Nov 13th, 2023
The information provided in this article does not, and is not intended to, constitute legal or financial advice; instead, all information, content, and materials available in this article are for general informational purposes only. 

The minimum amount that a debt collection agency will sue for is dependent on the creditor. Each creditor is different, so let's go through how the process works and help you estimate whether your creditor will sue you.

Have you recently fallen behind on your debt payments? If you have, you may be worried about what might happen to you. You may even be wondering if you are in legal trouble. But how much money do you have to owe to a debt collection agency in order for a lawsuit to be a legitimate danger? And are there any other factors to consider? We will answer these questions and more in the content that follows. 

The Minimum Amount a Debt Collection Agency Will Sue For

Owing any kind of debt can put you in danger of debt collection tactics, but one of the most extreme debt collection tactics wouldn’t just happen over a few dollars. So how much might a debt collection agency sue for? The answer might surprise you. Most information on the internet says that debt collectors won’t sue for less than $1,000. However, the minimum amount a collection agency will sue you for is about $500. 

Click Here to Use Our Free Lawsuit Likelihood to Estimate Your Chances of Being Sued

Now we are not guaranteeing that, if you’ve lapsed in payments on a debt of $500 or more, you will definitely get sued. There are many different factors that go into whether or not a debt collection agency will sue over a debt. It is important to know, however, that agencies are in fact willing to file a lawsuit against what some may consider a smaller debt. 

Before You Are Sued, Understand Your Options To Avoid Garnishment

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Why Do Debt Collection Agencies Sue?

Debt collection agencies have made a business around collecting debts that creditors have not had luck obtaining payments on. After an account has become delinquent, creditors will exert only a certain amount of energy trying to get a payment back. If they are unable to get a payment from you, they may then decide to sell the debt at a reduced cost to a debt collection agency. 

Once the debt collection agency has control of your debt, they will also begin pursuing you for repayment. They may do this through phone calls, letters, emails, home visits, and more. While they cannot overly harass you, they can consistently come after you. 

After a while, you may get notice of an impending lawsuit. Typically, debt collection agencies weigh whether or not it is worth it to file a lawsuit against you. If they deem that it is worth their time and resources, then they will take you to court and hopefully receive a court mandate ordering you to repay what you owe. If this is granted, typically you may see your wage garnished up to 25% for most personal consumer debt. The goal of suing you is to see payments coming in, regardless of how they come in. Sometimes, the only way to accomplish this is by filing a lawsuit against the debtor. While this may be generally true, it isn’t always the case with every debt collection agency. Let's take a look at some of the factors debt collection agencies take into consideration when deciding whether or not to sue.

Do All Debt Collection Agencies Sue?

The short answer is no, not every debt collection agency will sue you. Filing a lawsuit takes time, money, and other resources that may not be practical for many creditors. With that said, there are some things that a debt collection agency will consider before moving forward with a lawsuit. Here are just a few:

Amount of Debt

While we believe that there are some debt collection agencies that will sue for as little as $500, we don’t necessarily think that $500 is enough incentive to get every debt collector to sue. If you owe an extensive amount — like upwards of thousands of dollars — there is A LOT of incentive to file a lawsuit. Even with the amount of money and time that would have to be dedicated to the case, the income would far exceed the cost. 

However, if there is a more complicated case over a debt that is only a few hundred dollars, there isn’t much incentive to pursue legal action. So your debt amount definitely impacts a debt collection agency’s decision to sue. 

Your Ability to Pay

Another thing the debt collector will consider is the amount of money your household brings home each month. While they may not be able to get exact numbers, they will be able to see the various debts you have and know your employment situation. Based on this, a debt collection agency may be able to decide whether or not it is worth their time to sue you. If the ultimate goal of a lawsuit is to either receive a court order to pay or grant a wage garnishment, their efforts are useless if you make below a certain line. 

With wage garnishments, collectors are only allowed to take a certain amount of your income. If your income is so low that they would only be getting pennies each month, it wouldn’t be worth their time or money to sue. However, if you have a decent salary, a wage garnishment can be well worth their time and effort. It is important to note that, if you make below a certain amount, you may be protected from wage garnishment. 

Their Own Resources

If the debt collection agency that owns your debt is a large chain, that probably means they have excess funds they can use to hire lawyers, file their lawsuit, and work their case. Should a smaller debt collection agency own your debt, there’s a possibility that they’d be willing to spend what little they are working with to get you to pay what you owe. If you are working with a mid-level debt collection agency that isn’t necessarily hurting for cash but doesn’t have a lot of excess, you may even sweep below their radar! While these aren’t hard and fast rules, typically, a debt collection agency has to determine whether or not it is a financially wise decision to spend potentially thousands of dollars in order to get you to possibly pay back your debt. 

How To Avoid Getting Sued by a Debt Collection Agency

If you have fallen behind on your debt and are worried that you are about to be sued, there are some steps you can take to protect yourself. One thing that will not help is no communication. If you have been informed that your debt collector is planning on filing a lawsuit, you NEED to talk with them. If you instead decide to ignore the notice, it is likely that the court will automatically grant your debt collector their judgment and you will be held liable for the payment without being able to plead your case. 

Instead, reach out to your debt collector! Agencies want to get the most amount of money they can with the least amount of resistance possible. That means, if they can get back most of the owed debt without having to go to court, it's likely that is the course they will choose. So call and ask about your options! Is there a payment plan you can set up? Is there a negotiated price the agency is willing to settle for? It can’t hurt to ask, but it definitely can hurt to ignore. 

There are other options if you are hoping to stop the chance of getting sued. Filing for bankruptcy can stop all pending cases against you, which means you potentially won’t have to worry about that lawsuit until after your case is discharged. However, if your bankruptcy case is dismissed without your debts being forgiven or paid off, creditors can immediately come after you once again. 

How To Respond To a Lawsuit

If you were unable to stop the lawsuit and were recently served, you still do have options. As we mentioned earlier, you DO want to respond quickly. However, there are a few different ways to respond that can help you. 

When you receive notice of the lawsuit, you will be required to send back in what is known as an Answer. This Answer informs the court and the debt collector what your response will be to the allegations. You can choose to either affirm the charges, deny the charges, or request further information from the debt collector. 

Luckily, the burden of proof lies on the one filing the lawsuit, so the debt collection agency must be able to prove the debt they are trying to collect on is yours. Since debt collection agencies tend to buy debts from other creditors, there is a chance that they do not have a paper trail that links you to the debt. If this is the case, the court will not hold you liable for the debt. Even if there is a trail, if any of the information is off, there is a chance the case will be dismissed. 

Can I Deny The Debt?

Because of these possibilities, it is recommended that, at the very least, you refuse to admit to any debt and request proof that the debt is yours. This puts the responsibility and work back on your debt collector. If they come back with concrete proof, it is likely that the court would rule in their favor. But it will give you time to get things in order and figure out your next steps. 

Be sure that you answer quickly, you request more information, and you don’t admit anything. You also don’t want to make any preemptive payments as you go into the hearing. There are some debts that have a statute of limitations based on the last day a payment was made towards the debt. If the statute of limitations date is nearing, your debt collector may pressure you to make a “good faith” payment. DO NOT DO THIS without advice from a legal representative. Making a payment resets the statute of limitations and could leave you responsible for even more debt. 


Even though $500 may not seem like a lot, to some debt collectors, it's enough to sue for. Because of this, you want to be sure you have a plan to either get rid of your debt or stop a lawsuit. Don’t be afraid to reach out to the debt collector and see what options are available to you! And if you’d like to talk to someone else about your options, always feel free to give Ascend a call. We’d love to help.