I've been served papers. What does this mean?

A couple of years ago my car was repo'd and I made payment arrangements for the remaining balance through the bank I had the loan through. There were times within those couple years that I wasn't able to make payments, made less than agreed, etc and now I've been served papers from the business collecting my debt. My questions..

What does this mean exactly?
Is this a summons and if not what's the difference?
Will I have to appear in court?
What steps do I take from here?
Is it too late to call the company and make payment arrangements?

I'm really clueless. Any and all info is greatly appreciated.

When you say "served " do you mean you have a court date? If not, they may take you to court but I doubt that. Your note has been Sold to a collection agency, they buy these notes for Penny's on the dollar. They will harass you endlessly. My advise to you is be assertive! One of there " tricks" is to tell you to pay a certain amount every month in hopes that you don't ask " for how long" and they suck you dry for years! Here's what you do and hopefully you kept records. Try and estimate how much is owed. Tell the collection agency that you refuse to deal with them on the phone and ONLY deal with them thru the mail!!! Make sure that EVERYTHING is in writing. They Hate this!! They will try and discourage it and may even tell you they can't, which is BS. Once it has been agreed too how much you owe have them PUT IT IN WRITING and Make Damn sure you have a payment END date. These people are Crooks, they prey on others misfortunes don't trust anything they say...So once again Only deal with them thru the Mail. Don't let them bully you! Your credit has already been hurt by this and they CAN NOT make it any worse. That damage has already been done Good Luck and Be tuff!

The first thing you should do is call the company and see if you can settle but given your less than reputable history they may be happy to take you to court and try and milk whatever they can. Depends on the amount you owe. If it's small they may want to settle just to avoid the legal hassle and the papers were primarily a scare tactic to get a response from you.

They can seek a judgement against you depending on the size of the balance and the state you are in. Generally speaking any balance above $1000 can qualify for paycheck/bank garnishment and any balance over $5000 can qualify for a lien against property.
This may just be the formality of making it a judgement. Even a judgement won't make money that you don't have appear so it just depends on how they try to enforce it. I do not believe that you need to appear unless you are planning to try to fight the validity of the debt.
When/if you do pay them - send a money order or cashier's check. Once you give a company your bank info over the phone, you are giving them all the information they need to enforce a bank garnishment at a later date.

I agree with Lisa on the bank garnishment. Pay by money orders only. Also, its possible the car loan company may have forwarded your checking account information to them from past payments made to the original car loan company. You could find out by calling and saying, I can make a good faith payment with you but I don't have my check book with me. Usually they will say, we have it on file and we can set up the date. Then you would know for sure if they have it or not. If they do, I advise to shut it down and open a different account at a different bank because if they get a judgement against you they will levy your bank account. I know because I use to to work for a collection agency for over 5 years. Be careful and watch your back. If it gets really bad then go to google. com and type in legalhelpers.. good luck!!