Is it possible to be sued while in a debt settlement program?

Yes, they can—it is possible to be sued while in a debt settlement program. A debt settlement program is nothing more than negotiation with a creditor. If while during those negotiations, you are in default on a debt (haven’t been making payments, or have been paying late or less than the full amounts due), the creditor can sue you to recover what you owe them.

If you had already struck a deal with the creditor, that would be different—once a settlement is worked out and agreed to by both parties, the creditor and the debtor are each bound by it. So once you’ve successfully settled, if you successfully settle, as long as you honor your obligations, the creditor can no longer sue you. However, until that point, a creditor may sue you, and if the debt settlement program is one in which you pay the debt settlement company and they hold onto your payments, not turning them over to the creditor, it’s fairly common  to be sued: you and the debt settlement company have no legal right to withhold payments from a creditor.

If you’re being threatened with a lawsuit, you should consult with an attorney. Not only will you need an attorney to defend yourself from a lawsuit, but you may wish to explore bankruptcy as an option—once your file for bankruptcy, collections efforts, including lawsuits, are stayed, or stopped at least temporarily, while the bankruptcy proceeds.

Talk to a Debt Settlement Attorney to make sure your debt settlement program is going smoothly, and you have protection from creditor lawsuits.

Good luck.