Perry,
ALWAYS answer the suit. Not answering means they WIN, automatically. In fact, you might owe $1000 dollars to them but they are suiing for $3000 and if you dont respond I think they get their full suit amount without ANY burden of proof. You not answering does not help anything. There are ways that your bank accounts and other financial accounts can be located with or without you.
Your best bet is to go to trial and plead your case if you have one.
May I ask, WHY are they going after 3 times the original debt? Could this credit card company be Capitol One?
In any event, I assume you had a credit card and stopped paying on it. The credit card company started tacking on late fees and possibly over the limit fees before they finally closed it and charged it off. Then the interest rate was probably around 20% and a few years have passed and they are probably adding on collection charges.
A lot of this depends on your credit card agreement which you need to check. You also need to check on when the account was closed and check on your states statute of limitations. There comes a point of time usually somewhere from 3-5 years depending on the state at which point they can no longer SUE you for the money but can still make collections efforts. Many credit card companies agreements have arbitration clauses in them now. If you have lost all this stuff, write the credit card company, send a certified letter requesting that they prove you owe that amount(request a detailed accounting of all the charges and fees). They are required by law to provide you with that in a certain time period.
It boils down to this, if you made the charges on the card and they charged you fees as per their agreement, and they have not exceeded the statute of limitations to sue you your best bet is to pay them because they will win.
Now if they are going for more than they are entitled too you need to show up in court and make them produce evidence of your charges and fees as per your agreements and show what the true value is..of coure then..you will be found liable for this plus the court costs..but it may be better than what they are going for now.
Basically if you owe them the money pay up.
AND to finally answer your question.. YES, they can garnish your paypal account.
Now for the sleezy advice.
Empty and close your paypal account prior to going to trial.
Put all your cash in an offshore bank in one of those islands where they have very strict privacy for their banking clients and get a visa debit card and whamo.. you can still bank to a degree and they cant touch it.
The downside to this is..once they have a judgement..they have a judgement and that is good indefinitely if I am not mistaken and theoretically can come after your assets ANYTIME in the future....including liens on your home,etc.
SO assuming they are suiing you within the statute of limitations...your best bet is to figure what you truly owe them including any fees they tacked on as per their agreement and be prepared to pay them that...in fact compile all that and send it to them in writing and offer to pay all of that or be prepared to live a marginal financial existence for the next 10-30 years. Just be careful!!! Anything you agree to with them get it in writing and read it VERY carefully and be extra cautious if you are dealing with a collection agency.
Once again back to the question.. YES.. I am not sure if paypal is considered a bank but they are certainly a regulated financial institution and your account can be garnished without a doubt if and when it is tracked down.
Remember, I am not an attorney..just a guy that has been in various "pickles" of one variety of another.. so this aint legal advice.. just suggestions based on my experiences and opinions.. if things get sticky, get a lawyer.