If Ace Cash Express is suing you, the one thing that matters this week is filing a written answer with the court before your response deadline runs out. Ignore the summons and you lose automatically — the judge enters a default judgment for whatever amount Ace claimed, and from that point Ace can move on your paycheck and your bank account without ever having to prove the debt. Answer on time and you keep every defense on the table: wrong amount, wrong plaintiff, expired statute of limitations, improper service, and more.
Read the Summons and Calendar Your Deadline
The summons you were handed states the exact number of days you have to file an answer. In federal court that window is 21 days after service.1United States Courts. Federal Rules of Civil Procedure – Rule 12 State courts set their own, usually somewhere between 20 and 30 days. Treat that date as a hard wall. One day late is enough for Ace to ask for a default judgment, and courts routinely grant them.
While you’re looking at the summons, pull out your original loan agreement if you still have it. Payday loan contracts spell out what Ace is allowed to charge on default — late fees, continued interest, sometimes collection costs — and those terms set the ceiling on what the lawsuit can legitimately demand. If you don’t have a copy, you can request one directly from Ace or obtain it through discovery once the case is underway.
Confirm Who Is Actually Suing You
Look carefully at the caption of the complaint. Payday lenders often sell delinquent accounts to third-party debt buyers, so the plaintiff may not be Ace Cash Express at all. This distinction changes which laws protect you.
Under federal law, a “debt collector” means someone collecting a debt owed to another party, not the original creditor collecting its own accounts.2Office of the Law Revision Counsel. 15 USC 1692a – Definitions If a debt buyer or collection agency is the one suing, the Fair Debt Collection Practices Act applies. That triggers a written validation notice within five days of first contact, listing the amount owed and the original creditor. You then have 30 days to dispute the debt in writing, and the collector must stop collecting until it sends verification.3Office of the Law Revision Counsel. 15 USC 1692g – Validation of Debts
If Ace itself is the plaintiff, the FDCPA’s validation rules do not apply. You can still challenge the amount in your court filings, but you don’t get the automatic 30-day dispute window. Either way, run the numbers: verify the original loan amount, check that interest and fees track your agreement, and look for any payments that weren’t credited.
Check Whether the Debt Is Too Old to Sue On
Every state sets a deadline for how long a creditor can wait before filing suit. For payday loans, the window typically runs three to six years depending on the state. Once it passes, the debt is time-barred and you can raise that as a complete defense.
The clock generally starts on the date of your last payment or the date the loan was originally due, whichever came later. Several things can restart it back to zero: making a partial payment, signing a new payment agreement, or, in some states, acknowledging the debt in writing. Payday lenders sometimes file on old accounts precisely because they expect no one to show up and raise the defense.
The defense is not automatic. Courts will not dismiss a time-barred case on their own. You have to plead the statute of limitations in your written answer, and if you miss the response deadline you lose the chance to raise it at all.
Confirm You Were Properly Served
Before a court can hear the case, Ace has to deliver the summons and complaint through legally acceptable means. Under federal rules and most state procedures, that means personally handing you the papers or leaving them with a responsible adult at your home.4Legal Information Institute. Federal Rules of Civil Procedure Rule 4 – Summons Mailing alone or leaving papers on the doorstep usually does not satisfy the rule unless a court has authorized an alternative method.
Ask the clerk for the proof of service filed in your case. It’s a sworn statement describing how and when the papers were delivered. If the address is wrong, the person named isn’t you, or the dates don’t match your recollection, improper service becomes grounds to challenge the court’s authority to proceed. It won’t make the debt go away, but it can force Ace to start the process over correctly and buy you time.
What to Put in Your Answer
Your answer responds to each numbered paragraph of the complaint one by one. You admit what’s true, deny what isn’t, and state “insufficient knowledge” for anything you can’t confirm from your own records. Silence counts as admission, so every paragraph needs a response.
Affirmative defenses go in the same document. Common ones in payday loan cases include:
- Statute of limitations has expired
- You were never properly served
- The amount claimed exceeds what the loan agreement allows
- The lender violated state lending caps or licensing requirements
- The loan terms were unconscionable
If you have counterclaims, include them in the answer to keep every issue in the same proceeding. File the completed answer with the clerk and send a copy to Ace or its attorney. Filing fees run roughly $50 to over $400 depending on the court. If you can’t afford it, ask the clerk about a fee waiver — most courts grant them below certain income thresholds.
Negotiating a Settlement
Most payday loan lawsuits never reach trial. Litigation costs Ace money, and the company usually has room to deal. Lump-sum offers commonly start in the range of 40 to 60 percent of the outstanding balance, though the number depends on how strong your defenses are, how old the debt is, and how much Ace realistically expects to collect.
You can negotiate at any point: before filing your answer, during discovery, or on the day of trial. The rule that matters is getting any deal in writing before you send money. A proper settlement agreement identifies both parties, states the exact amount you’ll pay, and includes language releasing you from any further claims on the debt. Without that release, nothing stops Ace from coming back later for the remaining balance.
If a reduced lump sum is still out of reach, some lenders will accept a structured payment plan. Your leverage grows if the statute of limitations is close to running or if you’ve raised defenses strong enough to make the litigation a losing proposition for Ace.
The Tax Bill on Forgiven Debt
Settling for less than you owe has a tax angle people often miss. When a lender cancels $600 or more, it files a Form 1099-C reporting the forgiven amount, and the IRS treats that amount as taxable income to you.5Internal Revenue Service. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments Settle a $1,500 debt for $600 and you could owe income tax on the $900 that was written off.
The insolvency exclusion is the escape valve. If your total liabilities exceeded the fair market value of your total assets immediately before the cancellation, you can exclude some or all of the forgiven amount by filing Form 982 with your return.6Internal Revenue Service. Instructions for Form 982 Many people being sued over payday debt qualify without realizing it. Add up everything you owe against everything you own; if the debts are larger, the difference is what you can exclude.
If Ace Wins: What They Can Actually Take
A judgment is a court order saying you owe the money. Turning that paper into cash requires enforcement, and each method has federal and state limits.
Wage Garnishment
Federal law caps garnishment for ordinary consumer debts at the lesser of two amounts: 25 percent of your disposable earnings for the week, or the amount by which those weekly earnings exceed $217.50 (30 times the $7.25 federal minimum wage).7Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment So if you take home $400 a week, up to $100 can be garnished. If you take home $250, only $32.50 can be taken. Several states set lower caps, and a few prohibit wage garnishment for consumer debt outright.
Some states also let you claim a head-of-household exemption if you provide more than half the support for a dependent. It isn’t automatic; you have to claim it through the court with documentation like tax returns. Check your state’s specific rules.
Bank Account Levies
With a court order, Ace can freeze funds in your bank account. You should receive notice before funds are withdrawn, which gives you a window to claim exemptions. Social Security benefits, VA disability payments, and certain other federal benefits are off-limits to private creditors under federal law.8Office of the Law Revision Counsel. 42 USC 407 – Assignment of Benefits If those benefits are direct-deposited into an account that gets levied, your bank must automatically protect two months’ worth of them from being frozen.
Property Liens
A judgment lien attaches to real property you own. It doesn’t force a sale, but it must be paid off before you can sell or refinance. Liens over small payday balances are relatively uncommon because recording and enforcing them often costs more than the debt. Even so, a lien can sit for years — often 10 or more depending on the state — accruing post-judgment interest that typically runs 3 to 9 percent annually.
Bankruptcy as the Emergency Brake
If Ace’s lawsuit is one problem in a much larger financial picture, bankruptcy stops it cold. The moment you file a petition, an automatic stay takes effect that halts virtually every collection action against you — lawsuits, garnishments, levies, and collection calls all stop at once.9Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
Payday loan debt is generally dischargeable in Chapter 7, which wipes it out entirely. In Chapter 13, it gets folded into a court-supervised repayment plan sized to what you can afford. Bankruptcy carries real credit consequences and isn’t a step to take over a single payday loan, but for someone drowning across multiple debts, the automatic stay is the most powerful tool available. Child support, alimony, and certain tax obligations aren’t covered by the stay; ordinary consumer debt like a payday loan is.
When the Lawsuit Itself Gives You a Counterclaim
If a third-party collector or debt buyer is the plaintiff, any FDCPA violations become a counterclaim that can offset what you owe. Common violations include calling at unreasonable hours, threatening arrest over a civil debt, failing to identify themselves as a collector, discussing your debt with friends or family, continuing to collect after you sent a written dispute during the 30-day validation window, or filing suit on a debt the collector knew was time-barred.
A successful FDCPA claim recovers actual damages plus up to $1,000 in statutory damages per lawsuit, and the collector pays your attorney’s fees.10Office of the Law Revision Counsel. 15 USC 1692k – Civil Liability The fee-shifting provision is why consumer lawyers will take these cases even when the underlying debt is small.
If Ace is suing you as the original lender, the FDCPA doesn’t reach it. But many states have their own consumer protection and fair lending laws that restrict what original creditors can do. Violations of state lending caps, licensing requirements, or collection practices can serve as defenses or counterclaims of their own.
Getting Help Before the Deadline
A consumer law attorney can review the complaint, spot defenses you’d miss on your own, and negotiate with Ace’s lawyers. Many offer free initial consultations on debt lawsuits, and fee-shifting statutes like the FDCPA can make the collector pay your legal costs if it broke the rules. If a private attorney is out of reach, legal aid organizations in most areas handle payday lending disputes, particularly cases involving predatory terms or collection abuse. Your state bar association’s lawyer referral service can point you to attorneys who handle consumer debt matters. The earlier you get help, the more options you keep. Once a default judgment is on the books, the climb back is much steeper.