Legal Question in Credit and Debt Law in California

Re: Lawsuit

Your lack of ability to pay is not a defense to the lawsuit and the judge won't care about that until after a judgment has been entered. If the creditor tries to garnish your wages or go after you bank accounts or other assets, you can file a claim of exemption and then the judge would consider how much of your wages or property that the creditor can take. You can also speak with a bankruptcy attorney about your case to see if you qualify for bankruptcy.

Re: Lawsuit

You will not be able to introduce evidence of your ability or inability to pay, because these matters are not at issue in the lawsuit. If you do not owe the money, or they are suing beyond the statute of limitations (4 years for a written contract, 2 years for an oral contract) you might have a defense.