“I just received papers from Portfolio Recovery in a lawsuit, what do I do now?”

“I just received papers from Portfolio Recovery in a lawsuit, what do I do now?”

"I just received papers from Portfolio Recovery in a lawsuit, what do I do now?"Let’s break this down into a few different points.

“Who is Portfolio Recovery Associates?”

Portfolio Recovery Associates or PRA is a debt buyer out of Virginia which files about 100 lawsuits a week in Alabama courts.

Most are filed in Small Claims and District Courts but a good number are filed in Circuit Court as well.

“I never did business with Portfolio, how can they have my debt?”

PRA will claim to have bought the debt from some other company.  [Remember a difference in “claiming” and proving.  I can “claim” to be a 5 time Super Bowl champion — but that might not be true.  🙂]

Occasionally they claim to have bought it from the original creditor but normally it has been bought from another debt buyer.

The typical price is around  3 to 5 cents on the dollar.  So a $1000 debt will be bought for 30 to 50 dollars, if not less.

“What does PRA want from me in the lawsuit?”

Portfolio wants a judgment against you for the full amount it sued you for.

Or it wants you to set up a payment plan where you pay off the full amount.

Finally, PRA will also accept a lump sum payment to settle the debt.

This amount is normally is around 75% of the full amount sued for by PRA.

“How can PRA sue me if it bought my debt for pennies on the dollar?”

If PRA truly owns your debt, then it has the right to sue as long as it follows the other laws such as not filing after the statute of limitations has expired.

This is a critical question as I have never seen PRA actually prove it owns the debts it sues on.

Having done this type of work for many years, I have seen PRA claim/swear/allege that it owns the debt.

But I have never seen PRA follow the rules of evidence enough to actually prove this in court when challenged on it.

“Why is filing my answer the most important thing I must make sure happens?”

Because if you don’t answer in time, then you will have a judgment against you.  A default judgment.

“How bad is a default judgment?”


It will accumulate interest on you.

It will show up on your credit report.

Your wages can be garnished up to 25% by Portfolio Recovery.

And your bank accounts can be drained (garnished).

It doesn’t matter if you need the money to pay your rent, your mortgage, your health insurance, buy food, etc.

You have to figure out a way to survive if your account is garnished.

So the key is to not allow a default judgment by filing your answer in time.

“What is my time limit to answer the PRA lawsuit so I don’t have a default judgment?”

In Small Claims Court you have 14 days from when you were served to answer the lawsuit.

In District Court you have 14 days from when you were served to answer the lawsuit.

Also, in Circuit Court, you have 30 days from when you were served to answer the lawsuit.

[If you want to know more about being “served” you can read this article].

 “That doesn’t seem fair as I want to have my day in court.”

I understand but if you don’t answer, you never get to have a trial.  You have to follow the rules of court.

You can do this on your own — this is called “pro se” or you can hire a lawyer.

Either way, make sure your answer gets properly and timely filed.

Let’s talk about your options….

“What are my five (5) possible options to deal with this lawsuit?”


While rarely a good idea, sometimes this does make sense.

It will wipe out all of your debts but normally not student loan debts.

You need to have your situation analyzed to discover whether you will be able to keep your car and home and whether it makes sense to do so.

You should only take this option if your unique situation demands it, because this is an extreme option.

Only do this “life changing” event if you must.


Especially in Small Claims and District Court, this can be an option.

You file the answer and then go try your case.

It does saves money.

However,  you will need to invest a good amount of time getting yourself prepared to handle the case on your own.

[You can watch this video or read the transcript about an overview of a collection case in Small Claims or District Court in Alabama].


Here you are normally either going to pay the full amount over time (12-36 months) or you are going to pay PRA a lump sum of around 75% of what they sued you for…

Once you pay, you’re done.

This is the advantage of this option.

Disadvantages include this Portfolio account will stay on your credit report and you may have tax consequences to the settlement.


If this is the option for you, hire a lawyer that you’re comfortable with, and make sure they know what they’re doing.

Find out if you will be expected at trial and, if so, how will you be prepared for trial?

What is the lawyer’s experience with Portfolio?

If you win, what is the plan for suing Portfolio in federal court?

This approach of hiring a lawyer will cost you money but will save you time over doing it yourself.

And you would assume that if you hire the right lawyer, you will increase your chances of success.


Sometimes consumers hire lawyers to help settle the case.

If this is your path, you’ll have to weigh the cost of hiring a lawyer to doing it yourself.

In addition, you need to see if you get any other benefit from the lawyer settling the case.

“How do I find out which option is best for me?”

If you live in Alabama, give us a call at 205-879-2447.

We can set up a phone or in person appointment at no charge and I can help you understand which option is best for you.

There is no one right choice as it depends on many factors.

We look at your entire situation to help you see which option is best for you.

I’ve represented hundreds of consumers who have been sued in these types of lawsuits and in suing these debt buyers, such as Portfolio, in federal court for violating the Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), and the Telephone Consumer Protection Act (TCPA).

I’ll be glad to help you.

Give us a call at 205-879-2447 or fill out this form and let us know about the lawsuit against you.

Thanks for reading, and have a great day!

-John G. Watts

PS — If you want to know more about hiring us, you can watch a video series (short videos) or read the short articles on hiring us.  To make it easy, we have broken the process into a step by step approach of hiring us through the end of your debt collection case.


  1. Blake says:

    If I have settled with Portfolio Recovery services, do I still have to file a motion or answer in the circuit courts?

    • John Watts says:


      I would always file an answer unless the case has been dismissed. Or you can let the court know in writing the case is settled but you need to respond. I’ve seen collectors settle with you but still get a default judgment.

      One view is they are just incompetent but have no bad motives.

      The other view is they are devious and did this intentionally.

      I’ll let you decide which is true but the result is the same — a judgment against you is a bad thing.

      So protect yourself by letting the court know either the case is settled or file your answer — do something so there is no default judgment.

      Best wishes!

      John Watts

  2. Dana says:

    hello, I live in Texas and my husband was recently sued by PRA for a charge off account we regretfully occurred when he lost his job few years ago. As I’ve done research online,on September 9, 2015 this PRA was ordered to pay 8 million in fines to the Consumer Bureau. I don’t know what to do. Should we settle? I dont want to accumulate court fees for a debt that we did charge off but I don’t want to fall victim to a corrupt debt collector either. I did submit an answer to the court denying claim for further evidence and proof of amount they say we owe but if it does come back its correct and legit, I dont want to have wasted time and more money. Please help! Thanks in advance.

    • John Watts says:


      Portfolio Recovery Associates (PRA) was nailed by the CFPB and here is how you may want to think of this.

      First, it should open our eyes to the misconduct of this company.

      Second, it should make us very leery of believing what PRA says over the phone, in letters, or in court.

      Third, it does not change the rules of evidence as court cases are decided one at a time, not based on what happened in some other case or before the CFPB.

      My suggestion is get with a Texas consumer protection lawyer ASAP to find out your rights. It may be that you can handle this case on your own (i.e. your husband represents himself) or it could be that you need to hire a lawyer.

      Bottom line the fine by the CFPB is a warning about who you are dealing with but it doesn’t mean that all of the hundreds and thousands of lawsuits filed by PRA go away. For example in Alabama PRA is still filing sometimes 100 lawsuits a week.

      It appears PRA has said, “OK, we got this little mess behind us. We paid a relatively small fine. Back to business as usual boys!”

      So protect yourself and see what your options are in dealing with PRA.

      Best wishes!

      John Watts

  3. Carolyn says:

    My husband died 3 months after I was served. He was so sick I missed the time limit although PRA never set a court date. Instead of filling out the NOT court ordered form abd went to rhe consumer protection agency who then contacted the PRA (not their lawyers) the very next day everything PRA was trying to decide to me stopped! If they called you in your cell phone without permission, threatened you or if the debt is past the statue of limitations don’t tell them where anything you my get own is located. You can request a hearing do your homework there are exemptions especially the wildcard exemption. Get to your courts website fill out the available forms and file them in court. Research the lawyers representing the PRA to learn thei tricks! The PRA just lost a huge lawsuit go read about it and do not trust anything about them unless it is through the courts!

    • John Watts says:

      Carolyn thanks for your comment and glad you were successful in your experience with Portfolio.

      I do want to point out that if someone is sued by PRA (Portfolio Recovery Associates) in Alabama, simply going to the CFPB or Attorney General is not enough. PRA can still get a default judgment against you if you ignore the lawsuit in the court.

      Its fine to go to the CFPB etc but also make sure you take care of what’s happening in court.

      Sometimes PRA may stop the lawsuit but plenty of times they don’t and judges don’t care what you do with the CFPB — they want a response filed in their court.

      Thanks again!

      John Watts

  4. Courtney Hoover says:

    Is there anyway I could just pay PRA the amount that is owed to them and not have to bring in any lawyers or go to court?

    • John Watts says:

      Yes — you can always call the lawyers for PRA and see what they will do on a settlement.

      If you go this route, I would make sure you understand what will happen to your credit reports and any tax consequences. And will they drop the case or will there be a judgment against you.

      And I suggest making sure you are confident that PRA really owns the debt — I’ve had probably 100 cases with PRA and I haven’t seen them own a debt yet. They may in your case but I would at least explore that if I was in your shoes.

      Best wishes and if you are in Alabama give us a call at 205-879-2447.

      Thanks for your comment!

      John Watts

  5. Harry Thompson says:

    I am in MS and I have no problem trying to work an arrangement with them and honestly probably paying the total amount but would rather try to do it monthly in reasonable amounts. I tried calling the lawyer that is in AL but get no answer. Sounds like it’s his personal cell phone when I looked him up on the internet. I only have 2 more weeks to respond. Everything I see says don’t call Portfolio, should I? Other than going to a lawyer in town here, how do I “answer” to the court subpena? Just looking for guidance.

    • John Watts says:


      I can’t tell you how the process works in MS as I’m not licensed there. I would recommend getting with a lawyer who does consumer protection — I would think you could call them and talk by phone. This should be easy for them to give you your options.

      Sometimes it is best to hire a lawyer to fight these and sometimes you can do this on your own with Portfolio. You certainly can settle with Portfolio — just be careful about tax consequences and credit reporting consequences.

      I wish I could help you more — call someone in MS and hopefully they can steer you in the right direction!

      John Watts

  6. Jack Mills says:

    It you settle with PORTFOLIO, can you still get it removed from your credit report and how?

    • John Watts says:


      It depends. If deletion of credit reporting was part of the settlement, you can.

      But normally Portfolio does not agree to this so then you would be in a situation where it needs to show a zero balance.

      If it shows MORE than a zero balance, after you settle (and pay), then that is false credit reporting.

      You may can sue under the FDCPA (Fair Debt Collection Practices Act) or do a dispute under the FCRA (Fair Credit Reporting Act).

      Definitely get with a consumer protection lawyer in your state to help you navigate this.

      Thanks for your excellent comment!

      John Watts

  7. Inna Bagrich says:

    I have court next week and I would like to talk to the judge about the debt I’m really upset because I made a bulk payment in 2014 and was told by that collection agency that than my debt was sold to Pra when I was in between jobs and did not pay . So they had a law suit that they lost also? I dont have a lawyer I talked to the judge over the phone should I just go to court and answer the questions? I have all the receipts from payments.

    • John Watts says:


      If you ever have a court date, make sure you go.

      I would talk to a consumer protection lawyer in your state to figure out your options — every state is different with how they handle things and I only practice in Alabama.

      If you are in Alabama, give us a call at 205-879-2447 and ask to speak to Carolyn.

      I’m unclear whether you are saying you paid off the debt that was supposedly sold to PRA or if that debt was not included in what you paid off.

      Wish you the best — a consumer protection lawyer in your state should be able to help you quickly.

      John Watts

  8. Rene Moreno says:

    I am being sued by PRA, I submitted a response (request to dismiss/denial) to the court and recently received a trial date in the mail. Will going to court and settling a payment plan with PRA still reflect as a judgment on my credit report? Would it be best to just settle out of court with PRA by calling them, then going to court on my trial date or just go to my Trial Date and settle there? I’m trying to avoid a judgment on credit report. How would I do that? Any help would be greatly appreciated.

    • John Watts says:


      I can only answer for Alabama suits — if you are anywhere else it may be different (check with a lawyer in your state).

      First, if you enter into a settlement payment plan at court, it all depends on whether you agree to a judgment. Often PRA wants a “consent judgment” to do a payment plan. Some judges allow a payment plan while keeping the case open — they call this the “settle/pay docket” but others don’t. So you have to decide if you want a consent judgment or not — I never agree to them.

      If you do agree to a consent judgment, then it may appear on your credit report under the “Public Records” as a judgment.

      Second, if you settle before going to court, it is really the same thing as settling at court. Either PRA will agree to a settlement without a judgment or they won’t. (If you do a lump sum — money all at once — there should be no judgment).

      Third — to avoid a judgment either get PRA to settle without one or beat them at trial. This is certainly doable in Alabama.

      Be happy to walk you through your options to avoid a judgment if you are in Alabama — call us at 205-879-2447 and ask for Carolyn in my office who can look up your case and then we go over your options.

      Thanks and best wishes!

      John Watts

  9. Gary Easley says:

    On the same type default judgement apply regarding the garnish of income and bank account apply if I filed a suit against a lender that resulted in my prevailing, who tried to collect $$ following the statute of limits expiring on the loan and not removing an illegal cloud ? Thanks

    • John Watts says:


      I’m a little bit unclear on your question.

      Are you asking how you can collect if you sued a lender and received a default judgment against the lender?

      If you have a judgment, you should be able to execute on that judgment. You can (depending on your state) potentially seize assets of the lender to pay the judgment. Normally, a lender will just cut you a check for the amount of the judgment.

      I may have misunderstood your question so let me know if I went down the wrong path.


      John Watts

  10. Jessica Massey says:

    My husband just got served with papers from portfolio collections. We live paycheck to paycheck as it is. What can we do since my husband works nights?

    • John Watts says:


      If you are in Alabama you can call us at 205-879-2447 and we can chat with you and your husband by phone so it is convenient.

      We’ll be glad to go over all your options.


      John Watts

  11. Nicole Johnson says:

    I am being sued BY PRA the original debt was capital one CC. I broke my ankle on 4/14/17 I got ahold of a debit management collector set up payment arrangements with PRA on 4/21/17 a payment was made of 98.50 on 5/30/17. Then my account was charged off on 6/8/2017 now I being sued 2 years later. What can I do to protect my self?

  12. Johnnie Johnson says:

    I am being sued BY PRA the original debt was capital one CC. I broke my ankle on 4/14/17 I got ahold of a debit management collector set up payment arrangements with PRA on 4/21/17 a payment was made of 98.50 on 5/30/17. Then my account was charged off on 6/8/2017 now I being sued 2 years later. I live in texas.

  13. Samantha says:

    I was served last week, being sued by PR. they bought the debt from Best Buy which was Citi Bank. I am just getting on my feet from separation with my husband. I barely make anything and can’t afford a lawyer. I know I need to answer the summons soon. I just don’t know how. PR has called nonstop and now I have them blocked. But I need guidance. I do live in AL.

  14. Eddy says:

    In 2018 around May A Family member got a call from PRA telling them that I own them money. my family member immediately contact me to let me know that this Collection agency call his phone. So I contact them and I ask what is the call in references. representative responded its a Financial matters I ask for what Company agent rep PRA. I said does this person that you are trying to reach does that person has a contract with PRA and they said yes … so I ask the rep to send me a proof of contract the PRA rep reply we will send you the proof… To make the story short they never sent me any proof of contract the only thing they sent me was statements. Still nothing …here is where I’m confuse On March 23 2020 I received an advertisement from a lawyer saying PRA FILED A LAWSUIT ON 3/16/2020 there’s is no case number. I don’t know what to do. Any advise?? How long for them to serve me? Also I’m on disability

    • John Watts says:


      I’m assuming you have been sued in Alabama. If another state, I don’t know the time limits.

      If you did not ask for “validation” or “proof” in writing — but instead only asked on the phone — then PRA had no obligation to mail you any paperwork. Even if you had asked in writing, a lot of times they can get by just sending the statements.

      Sounds like you are sued now. If if small claims in Alabama, you have 14 days from when served. They have quite a while to serve you.

      Here’s my suggestion — call my office at 205-879-2447 and ask for Carolyn. She can look up the lawsuit, send you a copy of it by email, and go over your options.

      We will be glad to help you any way that we can.

      Thanks and best wishes

      John Watts

  15. Yesenia Moreno says:

    Hi there so I just got sued by portfolio recovery associates synchrony bank walmart. Don’t have any money to hire anyone, not tryint to fight this. Just settle to an agreement. Do i need to speak with them directly? And also do I still need to file an answer back? How do I do that? Don’t know who or where to start with.

  16. Yesenia Moreno says:

    Hi there so I just got sued by portfolio recovery associates synchrony bank walmart. Don’t have any money to hire anyone, not tryint to fight this. Just settle to an agreement. Do i need to speak with them directly? And also do I still need to file an answer back? How do I do that? Don’t know who or where to start with. (Texas)

Leave a Comment