Do I go through mediation or go all the way to court if I am being sued by a collection agency?

Unfortunately, the state law may dictate the amount the creditor can garnish. Also, you need legal advice to determine if the same creditor can garnish other assets. This is a very dangerous situation that you cannot ignore. Let me know if you want information about bankruptcy which should take care of this problem.

You owe the money so the court will just enter a judgment. In mediation you can try to work out an agreement and a payment plan which will also result in a judgment unless there is a settlement and you pay in full.

Yes, what you describes does happen and I do commend you for attempting to pay something. However, in a default situation the creditor must look to enforce its right to repayment, which usually means a lawsuit. Inability to pay is a defense that only stands up in bankruptcy court, so often entering into a repayment agreement is the best a consumer can do if they are somewhere between bankruptcy and judgment proof, meaning the consumer has some means to pay but not the amount or the schedule they would like. In some courts I've been in, the court will order a two year payment plan, but not all.

If you're being sued for a debt, you should contact an attorney. Mediation, as it's typically conducted, often isn't a consideration for collections attorneys, and proceeding to trial often doesn't make financial sense for either the debtor, the creditor, or occasionally both. You may have valid defenses to the debt, or otherwise you may be able to negotiate a settlement that can save you significant funds, even after paying your attorney fees it all depends on the type of debt, your ability to pay, and language contained in the contract you signed. Additionally, do not post facts about your financial situation and/or you ability to pay online. While your name might not be attached, if litigation commences through discovery toward a trial for whatever reason, such disclosures could theoretically be used against you, as often a debtor's ability to pay is one of the key factors in gaining leverage in negotiations.

If you are being sued, not merely receiving demand letters from the agency, then you are already in court. The court may offer one or more types of mediation as an alternative, and you may offer to settle the case without mediation. However, if you are being sued, you are in court and must respond to anything you receive. If able to afford one, get an attorney.

You should do all that you can in order to resolve this matter, mediation nor trial appears to make sense as you seem to be saying that you acknowledge this obligation. You also have other options, including potentially a bankruptcy. You will eventually have to commit to an amount per month. I would suggest an attorney to assist in malign sure the agree is enforceable and properly written. If a judgment is entered, and you do not know what you are doing, your assets will be subject to seizure and sale, and your wages garnished. Doing it right the first time is always better, and cheaper, than trying to fix an error.