What to Expect if You're Sued Over a Debt
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.
Being sued over a debt 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. You can read more about the debt collection process here.
This article explains the debt lawsuit process—how cases start, what to expect in court, and what happens if you don't respond. Understanding the big picture can help you make the right decisions.
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, where the rules are different. Go here to read our guide to small claims court.
The steps in a debt lawsuit
A typical debt collection case in circuit court in Oregon includes the following steps:
- You will get court papers called a "summons" and a "complaint." These tell you that you're being sued and why.
- You have 30 days to respond. If you don't, the court may enter a default judgment against you, meaning the other side wins automatically.
- If you respond, your case will be scheduled for arbitration if the amount is $50,000 or less. Otherwise, the court may schedule a trial.
- Arbitration is a faster, less formal process than a trial. It's decided by a neutral arbitrator (generally a lawyer or retired judge) rather than a judge or jury.
- If your case gets to arbitration or trial, the side that sued must prove that you owe the debt and they have the right to collect it. You can respond by showing that the debt is not yours, the amount is wrong, or you are not legally required to pay it.
- If you lose in arbitration, you can object and ask for a new trial in front of a judge or jury, which gives you another chance to prove your case but has extra costs.
- After the decision: If neither side objects to the arbitrator's decision, or the case is decided after a trial, the court makes the decision official in a legal document called a judgment.
- If you win, the judgment will say whether you are protected from paying some or all of the debt.
- If you lose, the judgment will say how much you owe and who you have to pay. If you don't pay, the other side can try to collect by going after money in your paycheck or bank account.
Filing a response doesn't mean your case has to go to arbitration or trial. But it can prevent a default judgment and give you more time to talk to a lawyer or negotiate with the other side.
What to know about each step when you're being sued
If someone sues you, they start by filing two important documents with the court: a summons and a complaint. The person who files the lawsuit must deliver copies of these documents to you. This is called service or being served.
The summons and complaint
The summons tells you that you are being sued and gives you the deadline to respond.
- It also tells you which court is handling the case. Look up each county courthouse and its contact information here.
The complaint explains who is suing you, how much they claim you owe, and why.
- The complaint should say where the debt came from, such as an unpaid credit card balance or medical bill.
- The amount may include court costs—and possibly interest and the other side's attorney's fees, although in Oregon many debt collectors do not request these.
The deadline to respond
You must respond to the lawsuit within 30 days of when you received the summons and complaint or the court can decide the case in favor of the other side.
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. Count all calendar days, including holidays and weekends. The 30th day is your last day to turn in a response. If it falls on a weekend, holiday, or a day the court is closed, your deadline moves to the next business day.
Responding to the lawsuit doesn't mean you have to go to arbitration or trial. It can protect your rights and give you more time to get legal advice, gather information, or negotiate a compromise.
If you don't respond before the deadline, the other side can ask the court to decide the case in their favor automatically. This is called a default judgment.
Read more about default judgments here.
Your options for what to do next:
- Pay the debt directly to the person or business that is suing you.
- Try to negotiate a compromise or settlement with them.
- File a response to buy more time and challenge the debt in arbitration or court.
- Choose not to respond to the lawsuit and be ready for a default judgment against you. This might be the right choice in some circumstances, but you should talk to a lawyer first.
Learn more about these options and what to consider when making your decision in our article here.
How to challenge the debt in court
If you want to challenge the debt, you must file a legal response called an "answer" before the 30-day deadline.
- If you are being sued for a debt that is $50,000 or less, your case will likely go to arbitration first instead of a full court trial.
- Once you file your answer, the burden is on the other side to prove their case.
- They must prove that you owe the debt and that they have the legal right to collect it.
You can challenge their case by showing that:
- The debt isn't yours,
- The amount is wrong, or
- You're not legally responsible for paying it.
A lawyer can help you figure out if you have any defenses or counterclaims, how strong your case might be, and what proof would help you win or reduce what you owe.
How to file a response: Go here to read our guide to filing a legal response and challenging the debt in court.
Our step-by-step guide: Go here to continue with our step-by-step guide to debt lawsuits.
Frequently Asked Questions:
There will not be a court date listed on either the summons or the complaint. This is because a court date will not be set until you file a response to the complaint. If you do not respond at all, the court may decide the case anyway without hearing your side. This is called a default judgment.
In some cases, you may not find out about a lawsuit against you until after the court decides the case. For some people, the first they learn of it is when they are told money is being taken from their paycheck or bank account to pay off the debt.
If a court decides the case without hearing from you, it's called a default judgment. This may happen if the person or company suing you wasn't able to deliver the legal papers to you directly because:
- You moved and didn't update your address, or were delayed in updating it.
- You did not have stable housing or were not living at one address for a period of time.
It is also possible that the person or company that said they delivered the documents to you made a mistake or didn't do their best to find you. If you think this may have happened, you should seek the help of an attorney because you may be able to fight the judgment against you.
If you don't file a response by the deadline, the other side can ask the court to automatically decide the case based on what they wrote in the complaint. This is called a default judgment.
- A default judgment allows the winning side to try to take money from your paychecks, bank accounts, or valuable possessions to go toward your debt.
The amount you owe in a default judgment may sometimes be less than if you went to trial and lost, depending on your circumstances.
- Responding may require you to pay a fee to file your paperwork, and arbitration and trial have additional costs.
- If you are low-income, the court may not require you to pay those costs.
- Filing a response can also give you time to talk to a lawyer and negotiate a compromise to pay less and avoid arbitration or trial
Go here to read about what to consider when deciding how to respond.
If you miss your deadline to respond but the other side hasn't asked the court for a default judgment, you can ask the court for permission to turn in your response late.
The court's decision says you legally owe the amount in the judgment. But it does not order you to pay. It is up to the person who won the lawsuit to try to collect the money they are owed.
- This is true whether they won after arbitration, a trial, or a default judgment.
- If you don't or can't pay the debt, the side that won can use the judgment to try to take money from your paycheck or bank account, which is known as garnishment.
However, Oregon law protects a minimum amount of your money to cover basic necessities. Oregon law also doesn't allow garnishment of money that comes from certain protected categories, including Social Security, disability payments, veterans' benefits, and others.
Learn more about garnishment and protections from garnishment here.
If you don't own any valuable possessions, and you are low-income or all of your money comes from protected categories, you may be protected entirely. This is called being collection-proof or judgment-proof, because a debt collector is unable to collect money from you.
Learn more about what collection-proof means in this article.
No, it is not a crime to ignore a debt lawsuit or to not pay a debt, even one that is in a court judgment.
In a consumer debt lawsuit, the court's decision does not order you to pay, and you cannot be sent to jail or charged with a crime for not paying.
- The rules are different for debts that are not consumer debts, such as tax debts, child support debts, and debts related to criminal cases.
- Go here to learn more about what is and is not a consumer debt.