What Should I Do if I’ve Been Sued for Debt?

Sued for Debt in Oregon & Washington

Usually, it takes roughly six months of missed payments until you can be sued for a debt. In general, creditors and staff members of credit card companies prefer to reach an agreeable payment arrangement with their debtors before taking legal action.

This is due to the fact that using legal means to collect a debt not only costs money, but it can also delay the process. However, it’s not impossible to be sued for a debt, particularly if you don’t get in touch with your creditor and repeatedly skip payments.

The fundamentals of what you should do if a creditor has initiated a lawsuit against you for unpaid debt are covered in this article. It will cover everything, including how to read a complaint and pick a lawyer.

What happens if you are sued for debt?

When a creditor files a case with a state civil court, naming you and, if applicable, your co-signer as defendants, a debt collection lawsuit is launched. The reason the creditor is suing you and its demands will be stated in the complaint. Typically, that includes the amount you owe plus interest, as well as potential court costs and attorney fees.

Debt collectors anticipate that the majority of people won’t show up to their hearing, so the court will have to enter a default judgment. A default judgment may give the creditor the following options:

• Wage garnishment.
• Assign a lien to your property.
• Try to freeze all or a portion of your bank account’s funds.

Being sued despite having good faith efforts

Even if you have promised to make small payments toward your debt or work with a collection agency, a creditor may still sue you. However, this is a less likely scenario because creditors normally do not file lawsuits against debtors who are making at least a good faith effort to return a debt.

Getting a Complaint and Responding to it

A legal complaint and summons are typically the first signs that you’re being sued for a debt. The complaint outlines the type of debt claims made against you as well as their financial value.

On the other hand, the summons informs you in writing that you must be present in court on a specific date if you desire to contest the claim.

Therefore, if you agree with the claim but would prefer to reach a settlement, you should normally respond to the complaint if you intend to defend against a creditor’s legal claim against you.

Debt defense against a claim

If you intend to contest a claim made against you, an experienced Portland and Washington debt defense lawyer can assist you in determining which defenses are the most reasonable. The case might not even be legal because arbitration clauses are frequently seen in consumer contracts.

Debt Ownership

A creditor suing you for unpaid debt must also be able to prove that they are the rightful owner of the debt.

Creditors typically sell debts to other organizations, which are then regarded legally as “debt collectors.” The original creditor is not subject to this requirement, but these buyers of debt should be able to show proof of the debt to file a lawsuit against you.

Therefore, if a debt collector contacts you, you should ask for written confirmation of the debt. It may not demand payment from you if it cannot offer written proof.

Requesting for appropriate documentation

Additionally, by law, creditors must either include a written contract or an account’s copy in the lawsuit or provide justification for its absence. You have the right to request that the court dismiss the action if the collector or creditor is unable to provide the appropriate documentation.

Other common debt defenses

• False identity
• Identity theft
• Debt has been discharged (in bankruptcy)
• Erroneous charges (if credit card debt)
• Creditor violating the Fair Debt Collection Practices Act 
• The debt has already been settled.
• The creditor didn’t properly serve you.

What happens if you file an answer?

The court will schedule a date and time for you and the creditor to appear in court if you file an answer. If you haven’t asserted a counterclaim, the judge will inquire as to whether you owe the obligation rather than your ability to pay it. The creditor will win the case and obtain a judgment unless you can demonstrate that you do not owe the money (or succeed because of another defense or a counterclaim).

The judge might order the creditor to take payments from you in a few circumstances, particularly in small claims court, but the judge is not obligated to do this.

What happens if you don’t file an answer?

The creditor will always prevail if you fail to submit an answer. The amount of money specified in the complaint will be the amount for which the creditor receives a judgment. 

Typically, only the summons and complaint will be mailed or given to you. However, the county courthouse indicated on the court papers is where you can obtain a copy of the judgment.

Judgment

A judge’s decision that you owe the creditor a specified sum of money is known as a judgment in a lawsuit for debts. The judgment will be for the sum of the outstanding bills, court expenses, attorney’s fees (in some situations), and interest on the unpaid bill if you fail to file an answer or demonstrate in court that you do not owe the money.

Negotiating or Settling your Debt Lawsuit

You have the choice to bargain with the company or complainant that is suing you. Because the business could find it advantageous to receive that money upfront, you can offer to make a one-time payment that is less than what you owe. They might prefer receiving a portion of the money quicker than all of it more gradually.

Typically, you have the option to:

• Negotiate to reduce the amount owed
• Accept a lump sum payment
• Create a payment plan

The initial contract and the person currently in charge of debt management may affect these options.

When to Get Assistance from a Lawyer?

Depending on the circumstances, you can require several attorneys. For instance, if you need to know what should you do if you have been sued for debt, a debt defense lawyer can help.

When you already have debt, lawyer’s fees and court charges can seem intimidating. Remember that a lawyer can file a counterclaim or fight for an automatic stay, giving you more time to look for debt defense.

Lawsuits for credit card debt might be simple. This helps you save time and money on legal bills, and there’s a good chance that having a pro look out for your interests can improve the outcome.

We can help you!

Have you been sued for a debt in Portland, Oregon? Make your move by reaching out to a knowledgeable Oregon debt defense attorney near you. 

At Northwest Debt Defense, our Oregon debt defense lawyers offer Portland residents and also those living in Salem, and Medford debt relief. We will fight for your debtor’s rights in and out of court. Contact us today for a free debt analysis.