What Happens if I’m Sued Over a Debt?

This article is being revised and edited. Please check back soon to read the final version.

This article is part of a step-by-step guide to debt collection lawsuits in Oregon. Go here to read the guide and see related articles. 

If you've been sued over a debt, it means a person or company has taken you to court to get a legal decision saying you owe them money. This usually (but not always) happens after they've tried to collect the debt from you in other ways and haven't been successful. Read more about the debt collection process here.

If you've been sued over a debt, you might be wondering what happens next. This article explains the debt lawsuit process—how cases start, what to expect in court, and what happens if you don’t respond—so you can understand the big picture before taking action.

• Is your case in small claims court? If your legal papers say "Notice of Small Claim" or "Department of Small Claims" somewhere on them, your case is in small claims court. Go here to read our guide to small claims court. 

The steps in a debt lawsuit

A typical debt collection case includes the following steps:

1. You are given copies of the paperwork: These are called a summons and complaint. Getting these papers is called service or being served. 
2. You have a deadline: You must respond within 30 days of getting the paperwork.
   • If you don't respond: Once the 30 days pass, the other side can ask the court to automatically decide the case in their favor. This is called a default judgment
   • If you do respond: You may be able to negotiate a compromise with the other side, called a settlement. Or you can go to trial and challenge the debt.
3. The case goes to a trial: To be successful at trial, you must be able to show that the debt is not actually yours, the amount is wrong, or you are not legally required to pay the debt. If you go to court and lose, the court will rule that you legally owe the money in a legal document called a judgment.
4. If you lose, the other side can try to collect: If the case ends in a judgment or a default judgment that says you owe money, the person or business that sued you can try to collect the money from your paychecks or bank account.

Continue reading for more about these steps. 

Understanding the court paperwork

If someone sues you in court, they start by filing two important documents with the court: a summons and a complaint. These papers are then delivered to you to let you know about the lawsuit.

What is a summons?

The summons is a legal document telling you that you've been sued. It includes important details, such as:

• The name of the court handling the case.
• The name of the person or company suing you. 
• The deadline to respond to avoid a default judgment

What is a complaint?

The complaint is the legal document that explains why the person or company is suing you and how much money they say you owe. 

• It will list the type of debt (for example, an unpaid credit card or medical bill)

• It might also ask the court to add certain court costs, such as fees they paid to file or deliver you the paperwork.

• The person or company that is suing you is called the plaintiff. They may also be called the creditor, which means the person or company that is owed a debt.

• If you are being sued, you are the defendant in the lawsuit. 

Where you are being sued matters

Debt lawsuits in Oregon are typically filed in either the "Small Claims Court" or "Circuit Court" in a particular county, depending on the amount of money involved and the complexity of the case. It's important to know which court is handling your case because the rules and procedures are different. If you have received a summons and complaint, it should say at the top of the first page which court the lawsuit was filed in.

Small Claims Court:

• For cases involving $10,000 or less
• The process is simpler; lawyers are not usually allowed, so both sides represent themselves
• Deadlines to respond are shorter—14 days from the date you're served
• There are no jury trials; instead a judge decides the case

To learn more about Small Claims Court, visit our collection of articles on Small Claims Court.

Circuit Court:

• For cases involving more than $10,000 or more complicated legal issues
• The process is more formal, and having an attorney is often recommended
• Deadlines to respond are longer—30 days from the date you receive copies of documents filed by the other side
• Jury trials are available if requested

Understanding which court is handling your case can help you better prepare and respond within the correct timeframe. 

How to count the days until your deadline: Start counting on the day after you received the court papers. Day 1 is the day after you were served. If your final day (the 14th or 30th day) falls on a weekend or holiday, your deadline moves to the next business day.

Default Judgments

If you choose not to respond (or never received the summons and complaint), the lawsuit will continue, and the court may make a decision without hearing your side. This could result in a "default judgment" against you. This legal decision would allow the creditor to collect money from your paycheck, bank account, or personal property through a process called "garnishment."

If you discover a default judgment against you, especially one you weren't aware of, there are steps you can take. Read more about default judgments.

Consider your options wisely

Responding promptly to a debt lawsuit gives you more control over the outcome and helps protect your rights. Whether you choose to fight the claim, negotiate a settlement, or address the debt in another way, taking action within the deadline is crucial to avoid the serious consequences of a default judgment.

If you're unsure about what to do, consider seeking legal advice or assistance as soon as possible.

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