First, make a note of the date, time and location you were served. This is important information, since the clock starts running on your response time from the date you were served. Failure to file a formal response to the complaint in court within the very short time allowed may result in a default against you (meaning you cannot challenge the claims, even if they are false).
2 - Read the Complaint
Do not make the mistake of ignoring the papers. Most people who get sued are generally aware of a pending dispute with someone else and when they get served, they think they know all about the claim. Most people who get sued feel they did nothing wrong . . . many feel that because they did nothing wrong, they can ignore the suit and it will go away. It does not just go away, and as noted in Step 1 - you have a very short period of time to file a legal document with the court to respond, or the plaintiff can enter your default. Read the complaint, and READ THE SUMMONS that was served with the complaint. That is the legal document that will tell you what you need to do, and it will tell you how much time you have to file a response in court. Be sure you write that date on your calendar to remind you.
3 - Get To Your Attorney
The plaintiff has (usually) hired an attorney to represent him/her and they have sued you. While you can legally represent yourself in court, without an attorney, I always recommend that if you are inclined to do that (bad idea), at the very least, consult with an attorney first to make sure you understand the enormity of your task in representing yourself. The rules of procedure and the substantive law are frankly too complex for most people to be able to adequately represent themselves. Do not delay in meeting with an attorney - remember, you only have a very limited time period to respond to the complaint.
4 - Notify Your Insurance Agent
If the lawsuit is based on injuries and damage from an automobile accident, you will need to immediately notify your insurance agent. Your agent will set up a claim and an adjuster from your insurance company will contact you with the name of an attorney they will hire (the policy says they pay your defense costs if you get sued for a covered accident) to represent you in the suit. If the lawsuit is not based on an auto accident, consider notifying your homeowners insurance company of the suit. Most people are not aware that one part of your homeowners policy includes coverage for lawsuits against you, and they will pay a lawyer to represent you for covered claims. You must notify them immediately when you get served with the lawsuit so they can arrange for an attorney for you.
5 - If You Have No Insurance, Try To Resolve the Suit
If you have no insurance to protect yourself, you have to make an economic decision. Even if you have no liability for the suit, you have to decide whether it is worth the time and expense to fight it. There is no easy solution for making this important and highly personal decision. Sometimes a candid phone call to the plaintiff's attorney where you explain you have no insurance and no ability to pay a judgment may result in the attorney losing interest in the case. To repeat, however once a case is filed, it does not just go away - you need to take some affirmative action to deal with it. An attorney is the best way to understand the suit and get advice on how best to proceed.
Additional resources provided by the author
Most major cities have local bar associations with lawyer referral services where you can typically get a brief consult for a small amount of money, and cities may also have pro bono legal services available to help. The most important piece of advice to remember is - do not ignore the lawsuit - act on it immediately and deal with it head on. Even better, be sure that you have plenty of liability insurance coverage (auto, homeowners, or business) for protecting your assets in the event you do get sued. This coverage for the costs of defending lawsuits will save you literally thousands of dollars, so buy it, and take advantage of it by sending the insurer copies of any lawsuits against you.