Court Decisions on Debt: Judgments and Default Judgments

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.

When you're sued for a debt, the final decision in your case is in a legal document called a judgment.

• The judgment explains how your case was decided. It says whether one side owes the other money, how much, and why. 
• It can also include extra costs, such as the winning side's court fees, which are added to the amount owed.

Judgments can happen after arbitration or a trial. But the court can also issue a judgment if you don't respond to the lawsuit. That's called a default judgment.

Understanding how judgments work and what they can lead to is important. This article explains judgments and default judgments, what they mean for you, and what you can do next.

What happens after the court makes a judgment?

A court's judgment in a consumer debt collection lawsuit will state whether one side legally owes the other side money. 

However, the judgment does not order or require the losing side to pay. It is up to the side that won to try to collect the money they are owed.

If you have a court judgment against you for a consumer debt that you can't or don't pay, you cannot be charged with a crime or sent to jail for not paying. Read more about what is or is not a consumer debt here.

How can the winning side collect?

The judgment gives debt collectors more options for trying to get money from you. 

• With a judgment, they can try to take money directly from your paycheck or bank account, which is called garnishment. Read this article to learn more about garnishment.

• They can also go after valuable things that you own. For example, the debt collector can put a claim on a house or car if you own one, which is called a lien. A lien means that if you sell that house or car, the money from the sale has to go toward your debt. Learn more about garnishment of property here.

What are the limits on what debt collectors can do with a judgment?

Even if a judgment is entered against you, debt collectors are limited in how they can collect on it. 

• Debt collectors cannot take all of your money: Oregon law always protects a portion of your paycheck and a minimum balance in your bank account.
• Money from certain sources is protected entirely. Debt collectors cannot take any money that comes from certain public benefits, such as Social Security benefits, unemployment insurance, disability payments, and others.
• Cars and houses have some protection. Oregon law protects vehicles worth $10,000 or less and a certain amount of the value of your home.
• Learn more about what types of income are protected in this article.

Are you collection-proof? In some cases, a debt collector won't be able to collect anything from you. This is called being collection-proof or judgment-proof. This might be you if all of the following are true:

• You don't have valuable belongings or property,
• You don't have a large bank account, and 
• You are low-income or all your money comes from protected sources.

Learn more about being collection-proof in this article.

How long does a judgment last? 

In Oregon, a judgment allows a debt collector to try to collect a consumer debt for 10 years. If the debt isn't paid off, the judgment can be renewed for another 10 years, meaning the debt collector can pursue the debt for up to 20 years.

• Interest may continue to be added to the debt owed, increasing the total amount owed over time.

What happens if there is a default judgment against me?

If you don't respond to a lawsuit by the deadline, the person or company suing, called the plaintiff, can ask the court for a default judgment. This means the court automatically decides in favor of the plaintiff based only on what they told the court in their complaint.

• The default judgment gives the plaintiff the same legal rights as a regular judgment. 

• It allows them to collect the money they say you owe, even if the amount is incorrect or the debt isn't valid.

A default judgment can also affect your credit and finances.

• It will appear on your credit report, making it harder to get loans, housing, or even employment.

• Interest may be added to the amount you owe, increasing what you have to pay over time. Learn more about this in our article about interest on debt in collections. 

If a default judgment has been entered against you, there may still be steps you can take.

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