Can a lawsuit be awarded against you if you have not be notified of the pending legal matter against you?

First of all, you should have been notified of the claim against you.  If there was improper notice of service the judgment can be thrown out.  Also, your unemployment check is exempt from garnishment; that means that your creditors cannot seize it.  You will need to speak with the attorney involved.  There are forms that you will have to fill out but if you do so ASAP you can probably get back any money that was taken.

As to what you should do about this in the future, you sound as though you may be a candidate for a Chapter 7 bankruptcy.  Once you file, an automatic "stay" goes into effect and your creditors can take no further collection action against you.

Here is a site that will explain the basics of bankruptcy as well as provide the forms that are needed to file.  This is something you may want to try and handle yourself: http://www.uscourts.gov/bankruptcycourts.html

If you would rather have an attorney help you with this, see if you qualify for Legal Aid or see if they can recommend someone to help you.  Also, check if there is a law school nearby to where you live; they typically run free/low cost clinics that handle these type cases.  Finally, you  can contact the local Bar Association in your county; they may have a list of attorneys who will take your case "pro bono" (for free) or at least for a reduced fee based on your income/circumstances.