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If a Creditor Takes You to Court for Unpaid Bills

Authored By: Legal Aid Services of Oregon LSC Funded
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If you owe money on unpaid bills, the creditor may sue you in court for the full amount you owe. You can be sued for an unpaid bill even if you offer to make small payments on your bill or even if you've told the creditor you would make full payments as soon as you could.

You will know that you are being sued, taken to court, when you are:

Served - court papers are delivered to you or to someone at your home. (In small claims court cases, you can be served by certified mail.)

The court papers you will receive are the:

Summons - a paper that says you are being sued in court and tells you how many days you have from the date you were served to respond (usually 30 days, or 14 days if you are sued in small claims court); and

Complaint - a written statement that says that the creditor believes you owe a specific amount of money. If you have a written contract with the creditor, the complaint may also say that you owe attorney's fees and court costs. The complaint may also say you owe interest on the amount of the unpaid bill. The name of the county and court where the lawsuit is filed are written on the summons and complaint.

If the lawsuit was filed in small claims court, the summons and complaint is called a "claim and notice of claim."

To respond to the summons or notice of claim, you must file an:

Answer - a paper that you give to the court that gives your defenses to the complaint (for example, that you don't owe the money) or that includes your counterclaims against the creditor.

How do you file an answer?

In a small claims court case, along with the claim and notice of claim, you will be served with a form you can use to file an answer. The clerk at the courthouse will also have copies of this answer form.

The court normally charges a fee to file an answer. But if your income is below a certain level, you will either be allowed to file the papers without paying or be allowed to pay the fee later.

Contact a law office or go to OregonLawHelp.org for more information on small claims court. If the case has been filed in a regular Circuit Court, and not in small claims court, you will probably need a lawyer to file an answer.

Defenses and Counterclaims

One defense in an unpaid bills case is that you do not owe any money on the unpaid bill. In a lawsuit for unpaid bills, it is not a defense that you can't afford to pay the debt.

Examples of defenses in unpaid bills cases

  • You don't owe the creditor any money on the unpaid bill;
  • In some cases, you were not 18 years old when you signed the agreement to buy the item;
  • The creditor is suing you later than the time the law allows.

In a counterclaim, you are saying that even though you owe money on an unpaid bill, the creditor owes you money because the creditor did something wrong. When you put a counterclaim in your answer, you are asking for money damages from the creditor that will reduce or cancel out the amount you owe on the unpaid bill.

Examples of counterclaims in unpaid bills cases:

  • The creditor or collection agency did something illegal in trying to collect the bill.
  • When you made the purchase, the creditor told you something that was untrue about the item (for example, that it was new when it really was used).
  • The creditor promised to provide a service (such as make a repair) and did a poor job.

See an attorney if you have questions about whether you owe money on the unpaid bill or if you might have another defense or a counterclaim.

What happens if you file an answer?

If you file an answer, the court will set up a time for you and the creditor to go to court. The question the judge will ask in the case (unless you've filed a counterclaim) is whether or not you owe the money, not whether you can afford to pay the debt. Unless you can prove that you do not owe the money (or win because of another defense or a counter-claim), the creditor will win the case and get a judgment.

In a few cases, especially in small claims court, the judge might require the creditor to accept payments from you, but the judge is not required to do this.

What happens if you don't file an answer?

If you don't file an answer, the creditor will win automatically by default. The creditor will get a judgment for the amount of money the creditor asks for in the complaint. (If there is a judgment against you for a case involving an auto accident, you could lose your driver's license. You should see a lawyer.)

You will usually not be sent or handed any papers except the summons and complaint. But you can get a copy of the judgment from the county courthouse named on the court papers.

What is a judgment?

A judgment in a case for unpaid bills is a judge's decision that says you owe a certain amount of money to the creditor. If you don't file an answer, or if you don't prove in court that you don't owe the money, the judgment will be for the amount of the unpaid bills, court costs, attorney's fees (in some cases) and interest on the unpaid bill.

The amount of the court costs and attorneys fees will be higher if you go to court and lose than it would be if you don't go to court. If you agree that you owe the debt - even if you can't afford to pay it -it will probably be less expensive for you not to file an answer and go to court.

But if the debt is an old one and you have not made payments recently, you might want to talk to a lawyer to see if this gives you a defense. Sometimes creditors try to sue for debts even though the time allowed by law to file the lawsuit has already passed. You usually need to do something to raise this defense before the 14 or 30-day deadline to file an answer. You should consult a lawyer before this deadline.

Also, you should be aware that when you make a payment on a debt, this restarts the period of time that the law allows for the creditor to file a lawsuit to collect that debt from you. So if you make a partial payment on an old debt, this may give the creditor more time under the law to sue you for the remaining balance.

See the Section on Filing a Challenge to Garnishment & Exempt Oregon Wages, Money & Property

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Last Review and Update: Jul 13, 2011