Due to the nature of this forum, it would be inappropriate for me to provide you with legal advice specific to your situation. However, I will tell you that, in my experience, failing to respond to a lawsuit is rarely the wisest choice for the consumer; even if you admit that you owe the debt in question, filing a response to the lawsuit and showing up at court will, if nothing else, make the creditor realize that you are not going to capitulate and allow a default judgment, as do the vast majority of consumers.
Some creditors claim that as many as 90% of consumer debtors either fail to file a written response or fail to appear on a scheduled hearing date, actions which both invariably lead the court to issue a default judgment in favor of the plaintiff (the person/company who filed the lawsuit).
When the creditor realizes you have filed an answer and are likely to show up in court, which both mean unexpected legal fees and several more months of non-payment on your account, the credit card company may be willing to compromise with you on repayment terms. Ideally, you should hire an attorney to draft a response to lawsuit, and to negotiate with the creditor's attorneys to reach a settlement of the company's claims against you.
Pennsylvania debt law
First, see the Bills.com resource Pennsylvania Collection Laws to gain a basic understanding of what a judgment-creditor can do should it prevail in lawsuit against you.
Second, if you cannot afford an attorney, you can navigate the process yourself by taking advantage of the Pennsylvania court's self-help resources -- for example, you can find general information in the FAQ section, while many of the forms you will need are available for download at the Pennsylvania Unified Judicial System forms page. Again, you should find an attorney if possible, but if you cannot, the resources I have listed should prove helpful.
In regard to paying the debt, it is not necessary to have a lump sum in hand before the creditor or its attorneys will negotiate with you. It is true that if you need more than a few months to pay the account, most creditors will not agree to a reduced-balance settlement, as they probably would if you could pay in a lump sum. However, once an account is in litigation, most creditors will refuse any settlement offer of less than 70% or 80% of the balance owed (as opposed to the 30% to 50% settlements often achieved on non-legal accounts), making the settlement option much less attractive.
What you said about creditors being unwilling to work out longer-term repayment agreements with consumers is simply untrue; in my experience, long-term payment plans (often 24-36 months) are much more common than settlements as a means to repay debts that are in litigation. Most consumers who are sued cannot raise a lump sum to settle, so if a creditor wants to be paid, it has little choice but to accept monthly payments, and most are willing to do so, as long as the monthly payments are sufficient to repay the debt within a few years time.
On a $12,000 debt, I would estimate that Discover would be looking for payments of at least $300 per month, though it may accept less if you can demonstrate that your failure to repay the debt was caused by a medical hardship, job loss, or other factor outside your control.
If Discover obtains a judgment against you, it may attempt to force you to pay the judgment by seizing any funds in your bank account and/or placing a lien on your home or any other property you own. While there are other means of judgment enforcement in Pennsylvania, bank levies and property liens are by far the most commonly used methods, while others, such as the seizure of valuable personal property, are rarely used against the average consumer. Thankfully, wage garnishment is not permitted by Pennsylvania law for the enforcement of judgments stemming from consumer debt, so you do not need to worry about the creditor taking money from your paycheck as it would be able to do in most other states.
Debt and jointly owned property
You are right to be concerned about property owned jointly with your husband, as joint ownership does not afford protection for all types of property. Jointly owned bank accounts would likely be subject to seizure of all funds on deposit, even if most of the money in the account was contributed by your husband. Most bank accounts are owned "jointly and severally" by the account holders, which means that all account holders legally hold a 100% claim to the funds in the account, which is why you can go into the bank by yourself and withdraw the entire balance of your joint account without your husband's authorization. Because you are considered to legally own 100% of the funds in your joint accounts, your judgment creditors have a claim to 100% of the funds, despite the fact that your husband is also listed as an owner.
Your home, if owned by you and your husband jointly, would likely be protected from any attachment or lien by judgment creditors who have a judgment against only one of you, due to "tenancy by the entirety," a somewhat peculiar ownership structure used in Pennsylvania; however, asserting this exemption may require an appeal of the original judgment, so you should consult with a Pennsylvania attorney for expert advice if you are concerned about your home having a lien placed against it for this debt. Even if a lien is placed, it is highly unlikely that the creditor would be able or willing to force the sale of your property, so if you are planning to pay the debt before you refinance or sell your home, the lien may have little effect on your day-to-day finances.
I again recommend that you speak with an attorney in Pennsylvania to discuss the potential effects of a judgment on your individual circumstances; even if you cannot afford to hire an attorney to represent you in court, a consultation to discuss the risk associated with the lawsuit filed against you by Discover is definitely worthwhile and may even be free, depending on the lawyer. I hope that you are able to work out a repayment plan and avoid the judgment enforcement issue altogether, but it is always wise to know the potential risk and benefits of a judgment so that you can make a well-informed decision about how to proceed.
I hope this information helps you Find. Learn & Save.