What happens if a collection agency sues a person and that person does not show up in court?

They get a default judgment and don't have to argue their case. Even if a person will lose, it's best if they show up and fight it. A judge is less likely to award everything a collection agency is asking for if the person in question shows up and challenges the agency (who will be asking for attorney fees and interest fees that are astronomical). It also helps to show up as collection agencies are not looking to have a long, drawn out court battle with you - they just want their money. If you show up, they will do their best to settle with you. But, they also know that 98% of people never show up so they just get a default judgment. Once they have a judgment, they have the law on their side and can force you to give up the money through wage garnishment and other sorts of unfavorable means. If you are being sued, show up!