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. 

When you learn you are being sued, it can feel overwhelming. The legal papers you receive, called a "summons" and "complaint," will say you have 30 days to respond to the lawsuit. You may be asking:

1. What does it mean to respond to a debt lawsuit?
2. Would responding help or hurt my situation?
3. What happens if I don't respond?

This article can help you answer those questions.

Key points from this article:

• Know your deadline.
• Respond to avoid a default judgment against you and challenge the debt, raise a defense, or 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 talke 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."

An answer tells the court the things in the complaint that you disagree with—for example, that the amount of the debt is wrong or that you don't owe the debt. An answer usually includes:

• Which statements in the complaint you admit (agree with), deny (disagree with), and which ones you need more information to admit or deny.
• Any defenses you have. A defense is a legal reason you shouldn't have to pay the debt.
• Any counterclaims you have. A counterclaim is when you sue the other side back in the same lawsuit because they did something wrong.  

You can also ask for more time to respond or to negotiate a compromise with the debt collector.

What happens after I respond?

After you turn in your answer, the court will usually send your case to arbitration if the amount involved is $50,000 or less. If it's more than that, the court may schedule a trial.

• Arbitration is a less formal process than a trial where a court-approved arbitrator (usually a lawyer or retired judge) will decide the case.
• Learn more in our article, "How Arbitration Works in Civil Lawsuits in Oregon."

Whether you go to arbitration or a trial, the person or business that sued you has to prove that you owe the debt and that they have the right to collect it.

Should I respond to a debt collection lawsuit?

Many people benefit from filing a response, even if they're not sure what their defense is—or even if they have one. 

• Filing an answer stops the other side from automatically winning by default. 

• It buys you more time to talk to a lawyer or try to work out a compromise with the other side. 

• Responding can force the debt collector to prove their case against you, and you don't have to prove anything up front.

It's also important to know that responding may cost money. 

Filing fees: You must pay a fee called an appearance fee to turn in a response. Contact your court to ask about current fees.

• If you do not make much money, you might qualify to file for free or pay later. 

• Ask the clerk at your court for a "fee waiver and deferral" application. You can also download the application and instructions from the court here.

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.

• If you are approved for a fee waiver when filing your response, you may also be able to avoid paying the arbitration fees.

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, to cover the other side's court costs.

• In some cases, you can end up owing more money if you go to arbitration or trial and lose, than if you don't respond. 

But remember: responding doesn't mean you have to go all the way through arbitration or a trial. It can buy you time to make an informed decision about the best next steps, including settling with the debt collector.

What happens if I don't respond?

• Once the 30-day deadline has passed, the other side can ask the court to decide the case automatically in their favor. This is called a default judgment. 
• If your deadline passes and the other side hasn't asked for a default judgment yet, you can still ask the court for permission to give them a late response.
• A default judgment doesn't order you to pay. It says you legally owe the debt, but it is up to the winning side to collect the money. Learn more about judgments and default judgments here. 
• A default judgment allows a debt collector to try to take money from your paycheck or bank account until the debt is paid off. Go here to learn more about this process, called garnishment. 
• It's important to fully understand these consequences before deciding not to respond.

Are you collection-proof?

• In Oregon, the law protects a minimum amount of people's money from debt collection.
• The law also protects certain kinds of income entirely, including public benefits like Social Security, disability, veteran's benefits, and others.
• When a person has no valuable belongings that can be sold, and no money that can be taken through garnishment, this is called being collection-proof or judgment-proof.
• Learn more about being collection-proof in this article.  

Reasons not to respond

If you've fully considered the consequences of a default judgment and, if at all possible, talked the decision over with a lawyer, you might consider not responding if:

• You agree that you owe the debt and the amount is correct, you're sure the debt collector can prove their case, and you don't have any defenses or counterclaims.
• Your income and belongings can't be taken because you're collection-proof and likely to stay collection-proof for a long time.

Should I get legal help?

Deciding whether to respond and how to respond to a lawsuit can be complicated. This is especially true if you want to challenge the debt, think you might have a defense or counterclaim, or are considering not responding at all.

Only a lawyer can give you advice about your specific situation. 

• Search our legal directory for low-cost legal services, or 

• Contact the Oregon State Bar's Lawyer Referral Service to get connected with a lawyer who can give you a low-cost consultation.

Frequently Asked Questions