Should I Respond to a Debt Lawsuit? Understanding Your Options
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.
Finding out you are being sued can be overwhelming. The legal papers you get, called a summons and complaint, will tell you that you have 30 days to respond. You might be wondering:
- What does it mean to respond to a debt lawsuit?
- Would responding help or hurt my situation?
- What happens if I don't respond?
This article can help you answer those questions.
Key points from this article:
- If you file a response, you can avoid a default judgment, challenge the debt, raise a defense, or even sue the other side.
- Responding costs money, and if you go to court but don't win, you may owe more.
- But responding can also buy you more time to negotiate a compromise that saves money for you and the other side.
- If you owe the debt and don't have a way to challenge it, you might consider not responding, but it's important to talk to a lawyer first to understand the risks.
- A lawyer can help you decide. Free and low-cost services are available.
What does it mean to respond to a debt lawsuit?
Responding to a lawsuit usually means giving the court a written document called an answer.
In your answer, you tell the judge what parts of the complaint you disagree with. For example, you might say the amount of the debt is wrong or that you do not owe the debt.
Learn more about filing an answer in our guide to responding to a debt collection lawsuit.
What happens if I don't respond?
If you miss the 30-day deadline, the other side can ask the court to decide the case in their favor automatically. This is called a default judgment.
- Learn more about judgments and default judgments here.
- If a debt collector gets a default judgment, they can try to take money from your paycheck or bank account to repay the money you owe. Go here to learn more about this process, called garnishment.
If you miss the deadline and the other side has not asked for a default judgment yet, you can still ask the court for permission to file a late response.
Some people should respond to a debt lawsuit
Many people benefit from filing a response, even if they are not sure what their defense is or if they have one.
Reasons to respond:
- Filing an answer stops the other side from automatically winning by default.
- It gives you extra time to talk to a lawyer or try to reach an agreement with the other side.
- Responding means the debt collector must prove their case against you. You do not have to prove anything right away.
Responding does not mean you have to go through arbitration or a trial. It can give you more time to decide what to do next, including the option to settle with the debt collector.
Some people should not respond to a debt lawsuit
Responding to a debt lawsuit is not free. You may pay some or all of these costs:
- Filing fees: You must pay a fee called an appearance fee to turn in a response. Contact your court to ask about current fees.
- Arbitration fees: If your case goes to arbitration, you and the other side must split the arbitrator's fee, usually between $150 to $200 per hour.
- The other side's costs: If the case goes to trial or arbitration and the other side wins, the arbitrator or judge may add more money to what you owe. For example, they may require you to cover the other side's court costs.
In some cases, you could end up owing more money if you go to arbitration or trial and lose than if you do not respond.
You might consider not responding if you:
- Understand the consequences of a default judgment.
- Agree that you owe the debt, the amount is correct, and you are sure the debt collector can prove their case.
- Don't have any defenses or counterclaims. A counterclaim is a reason you can sue the debt collector.
- Do not have enough money to be garnished, which means you are “collection-proof.” Learn more about being collection-proof in this article.
Should I get legal help?
You might consider getting legal help if you:
- Want to challenge the debt.
- Think you might have a defense or counterclaim.
- Are considering not responding at all.
Only a lawyer can give you advice about your specific situation. To find a lawyer, you can:
- Search our legal directory for low-cost legal services.
- Contact the Oregon State Bar's Lawyer Referral Service to get a low-cost consultation.
Frequently Asked Questions
The debt isn't yours: You don't recognize the debt, the debt belongs to someone else, or they cannot prove you owe it.
The amount is wrong: The amount in the complaint includes incorrect charges, fees, or interest. Go here to learn more about interest on debt.
The debt is too old to collect: Most debts have a time limit for how long someone can try to collect them. In Oregon, this is usually six years from your last payment, but the time limit can reset in some cases. Learn more about time limits on debts here.
If you think the debt collector did something wrong, you can sue them back. This is called a counterclaim. Common examples of counterclaims in a debt collection lawsuit include:
- The debt collector harassed you or used threats to get you to pay the debt.
- The other side is trying to collect a debt they aren't legally allowed to collect (like one that was erased by bankruptcy).
- The person or company suing you is not telling the truth about how much you owe or is adding extra charges you don’t owe.
Go here to learn more about what debt collectors are not allowed to do.
If you can prove your counterclaim, you may win money to cover the harm they caused and your lawyer's fees.
If you decide to respond to a debt lawsuit, you need to file your answer with the court before the 30-day deadline.
Learn how in our guide on how to file a response to a debt lawsuit.
It explains how to fill out the answer form, what to include, where to file it, and how to ask to file for free if you cannot afford the filing fee. It also answers other common questions.
If the amount of the debt is $50,000 or less:
- After you turn in your answer, the court will usually send your case to arbitration.
- Arbitration is a less formal process than trial. A court-approved arbitrator, usually a lawyer or retired judge, will decide the case. Learn more in our article on how arbitration works in civil lawsuits in Oregon.
If it's more than $50,000, the court may schedule a trial.
If your case number is _ _SC_ _ _ _ _, then it’s been filed in small claims court.
If your case number is _ _CV_ _ _ _ _, then the case has been filed in regular circuit court. Sometimes cases for smaller debts are filed in regular circuit court because lawyers cannot file in small claims court.