Do you owe them the money? If your answer is yes, then you could call the creditor's attorney and work out a payment plan. If your answer is I owe them some money but not the amount they are alleging, then you could go to trial. You could defend yourself and pay the Appearance Fee of approximately $200 or you could hire an attorney. At trial the judge will decide.
The creditor has just gotten a judgment against you: Assuming you did nothing when you were served the law suit summons, the creditor probably got a Judgment for the money they told the judge you owed them. Now, the creditor will attempt to collect on the Judgment by (1) Garnishing your wages, (2) Garnishing your bank accounts and (3) Recording the Judgment against your home which is like having a 2nd or 3rd mortgage against your home.
Can you be arrested? You get a Citation to Discover Assets...After the creditor gets a Judgment against you, the creditor will serve you with a "Citation to Discover Assets." A Citation to Discover Assets is a notice to appear in court and disclosed all assets you own to the creditor. You must disclose where you work, what bank accounts you have and what real estate you own, what cars you own, etc. If you fail to appear in court for a Citation to Discover Assets, the judge will hold you in contempt and you can be arrested.
KEEP IN MIND, THAT FILING BANKRUPTCY WOULD ELIMINATE THIS JUDGMENT.