What Happens if I'm 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.
If you've been sued over a debt, that 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 are given copies of paperwork, called a summons and complaint, that tell you you are being sued.
- You have a deadline of 30 days to respond.
- If you don't respond by the deadline, the other side can ask the court to automatically decide the case in their favor. This is called a default judgment.
- If you respond, you can try to negotiate a compromise called a settlement, or go to trial and challenge the debt.
- If the case goes to a trial, you can defend yourself by showing that the debt is not actually yours, the amount is wrong, or you are not legally required to pay the debt.
- If you lose, the other side can try to collect. If you don't pay, they can try to take money from your paycheck or bank account to pay off the debt.
What happens when you are sued by a debt collector
If someone sues you in court, 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.
- It should say where the debt came from, such as an unpaid credit card balance or medical bill.
- The amount they say you owe may include interest and the other side's court costs.
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.
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 in our article about default judgments here.
Your options for what to do next:
- Pay the debt off directly to the person or business that is suing you.
- Try to negotiate a compromise or settlement with them.
- Respond and challenge the debt in court by showing that the amount is wrong, you don't actually owe the money, or you don't legally have to pay it back.
- Choose not to respond to the lawsuit. The court will most likely decide the case for the other side in a default judgment.
Learn more about these options and what to consider when making your decision in our article here.
To challenge the debt in court:
- File your own legal papers before the 30-day deadline.
- After that, the court will schedule a trial for your case.
- You can still use the time before the trial to try to negotiate an agreement with the other side and avoid trial.
- If you lose at trial, the amount that you end up owing may be more than if you chose not to respond and received a default judgment.
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.
More questions about debt lawsuits:
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.
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.
- The amount you owe in a default judgment is often less than if you went to trial and lost. This is because the judge can add additional costs and fees to your debt for the trial.
- 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.
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 a trial or through a default judgment.
- If you don't or can't pay off 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, veterans benefits, and others.
- If you don't own any valuable possessions, and you are low-income or all of your money comes from these protected categories, you may be protected entirely. This is sometimes 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.
Learn more about garnishment and protections from garnishment here.
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, called a judgment or default judgment, 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. Go here to learn more about what is and is not a consumer debt.