Sued for Debt in Tennessee? Here's What to Do Next

30 days from service.

6 years for written contracts. 4 years for open accounts.

Yes, but low-income earners below $217.50/week are fully exempt.

General sessions court up to $25,000. Circuit court for larger amounts.

Most consumer debt collection cases in Tennessee are filed in General Sessions Court, which has civil jurisdiction up to $25,000 under T.C.A. § 16-15-501. The process is informal compared to Circuit Court. When you are served, you will receive a summons with a specific court date, often less than 30 days away. You do not need to file a written answer before the court date; you appear and present your defenses orally. Show up. If you do not appear, the court will enter a default judgment, which the debt buyer can then enforce by garnishment and other means. Bring all documents you have, including the original contract if available, payment records, and any letters from the collector. Demand that the debt buyer produce the bill of sale, chain of assignments, and original account agreement. If you lose at the General Sessions level, you have an absolute right to appeal to Circuit Court within 10 days for a do-over with full pleadings and discovery, which is a major opportunity many defendants miss.

Tennessee requires collection agencies operating in the state to be licensed under the Tennessee Collection Service Act at T.C.A. § 62-20-101 et seq. The Tennessee Collection Service Board, part of the Department of Commerce and Insurance, administers the licensing program. You can search the state licensing database online to verify whether the agency contacting you holds an active license. Tennessee courts have held that an unlicensed collection agency may not be able to enforce a debt in Tennessee courts and that collection activity by an unlicensed agency can violate state law. If you are sued by a collection agency or debt buyer, check the license status before responding. A licensing defense, raised properly, can result in dismissal or in significant leverage for settlement. You can also file a complaint with the Collection Service Board against an unlicensed or noncompliant agency. The Board has authority to fine, suspend, or revoke licenses.

Tennessee applies a six-year statute of limitations on most contracts under T.C.A. § 28-3-109, although shorter periods can apply depending on the type of contract and whether the underlying transaction is treated as a sale of goods under the UCC. Medical debt is typically treated as an account or open account, and Tennessee courts have generally applied the six-year period to written account debts. The clock starts on the date of the first missed payment that was never cured. Once six years have passed without a payment or written acknowledgment, the debt is generally time-barred. Making a partial payment or written acknowledgment can restart the clock, so do not pay anything on an old medical debt without legal advice. Recent Tennessee and federal reforms have also addressed how medical debt can be reported to credit bureaus and how soon it can appear, but those reforms do not eliminate the underlying obligation. If you are sued on a stale medical debt, raise the statute of limitations as an affirmative defense in your answer.

After a judgment, Tennessee wage garnishment is generally capped at the lesser of 25% of disposable earnings or the amount by which your disposable earnings exceed 30 times the federal minimum wage per workweek. Tennessee provides an additional consumer protection through T.C.A. § 26-2-106, which allows a $2.50 per week reduction in the garnished amount for each dependent child under 16, up to a cap. The dependent reduction must be claimed by the debtor by filing a sworn statement with the court. Disposable earnings means what is left after legally required deductions like federal and state taxes and mandatory retirement contributions. Federal student loans, taxes, and child support follow different rules and can result in garnishments above the 25% cap. If a collector tells you they will garnish more than 25% of a non-government debt or fails to honor the dependent reduction, that conduct can be a violation of the FDCPA and the Tennessee Consumer Protection Act.

The Tennessee Consumer Protection Act at T.C.A. § 47-18-104 prohibits unfair or deceptive acts or practices affecting trade or commerce in Tennessee. The Tennessee Attorney General's Division of Consumer Affairs administers the Act and accepts complaints, and the statute also creates a private right of action for individual consumers. Tennessee courts have applied the TCPA to consumer debt collection conduct, particularly where a collector made false statements about the amount or character of a debt, misrepresented its authority, or used unconscionable tactics. Damages under the TCPA can include actual damages and, in cases of willful or knowing violation, treble damages, plus attorney fees. Stacking a TCPA claim with a federal FDCPA claim and a Tennessee Collection Service Act argument can substantially increase leverage in settlement discussions. To preserve TCPA claims, document the collector's conduct in writing as it happens, keep all letters and recordings, and consider consulting a consumer attorney about both defense and counterclaim strategies.