Debt Collection - Answering a Complaint

Answering a Complaint to Collect a Debt in Formal Civil Cases

Frequently Asked Questions (FAQs)

How do I respond to a Complaint to Collect a Debt?

If I am sued in small claims court, can I use the Answer & Counterclaim to Complaint to Collect a Debt?

How do I fill out the Answer & Counterclaim to Complaint to Collect a Debt?

What are affirmative defenses?

Should I argue an affirmative defense?

What does breach of contract mean?

What does violating fair business laws mean?

What are the types of violations that happen under the fair business laws?

What is the Offer to Pay section?

What happens if I don't file an Answer?

What happens after the Defendant files the Answer?

► How do I respond to a Complaint to Collect a Debt?

You can respond to the Complaint by filing an "Answer" within 20 days of being served with a copy of the Complaint.

The Answer is where you:

respond to each statement of the Complaint by saying whether you agree, disagree or don't know;
state one or more of your affirmative defenses, if there are any, which challenge the Plaintiff's right to bring the case against you and explain why the Plaintiff shouldn't win the case;
make a counterclaim, if there is one, which is a legal claim you have against the Plaintiff;
can offer to resolve the case by making an agreement with the other side, rather than having the judge decide.

You can file:

Answer & Counterclaim to Complaint to Collect a Debt, CIV-481

► If I am sued in small claims court, can I use the Answer & Counterclaim to Complaint to Collect a Debt?

To stay in small claims court, you are supposed to use the Small Claims Answer form, SC-3. If you want to move the case from Small Claims Court to District Court, check the box on the Answer & Counterclaim to Complaint to Collect a Debt, CIV-481. By checking the box, you are agreeing to the case being heard as a civil case to collect a debt according to the formal Rules of Civil Procedure and Evidence instead of the more informal small claims process. You can learn more about the differences between these two types of cases.

How do I fill out the Answer & Counterclaim to Complaint to Collect a Debt?

You can use:

Answer & Counterclaim to Complaint to Collect a Debt, CIV-481

Make sure to have the Plaintiff's Complaint in front of you so you can refer to it when filling out the Answer & Counterclaim. It will be easier if you review the Complaint before you start.

The Answer & Counterclaim to Complaint to Collect a Debt has 9 sections:

The "Caption" where you circle "District" and fill out the top part of the first page with the court location, party names, and case number exactly as it is filled in on the Complaint.
The introductory paragraphs where you write your name, ask to move to District Court if you were sued in Small Claims Court but want your case to be in District Court, and where you can ask to move the case to a different court for hearings, decisions, and a trial if there is one.
The "Answer" where you respond to the facts the Plaintiff stated in the Complaint, and say whether you agree, disagree, or don't know.
The "Affirmative Defenses" where you list any defenses you have that show the Plaintiff should not win the case. There are many different affirmative defenses so read all of them to see if any apply. You will have to prove the affirmative defense if there is a trial. You can read more about affirmative defenses.
The "Counterclaim" where you state any legal case you have against the Plaintiff. You can read more about counterclaims.
The "Offer to Pay" where you can tell the Plaintiff if you would like to try to settle the case by creating a payment plan or paying a specific amount. You can read more about the offer to pay section.
The "Request for Relief" where you state what you want the court to order at the end the case.
The contact Information where you fill out your contact information and sign the Answer. It is important that the court always have current contact information for you so you can be notified of orders or court hearings.
The "Certificate of Service" where you tell the court how you delivered a copy of the Answer & Counterclaim to the Plaintiff.

After you fill out the Answer form, make 2 copies (so you have 2 copies and the original).

Give 1 copy to the Plaintiff's attorney (or the Plaintiff if there is no attorney) by either first class U.S. mail or hand delivery. This is called serving the other side. Write when and how you served the Plaintiff at the bottom of the original Answer & Counterclaim form in the Certificate of Service Section.
Keep 1 copy for your records.
File the original Answer & Counterclaim in court within 20 days of being served with the Complaint. Count every day. If it ends up due on a Friday, Saturday, Sunday, or holiday, it is due the next day the court is open. Remember, the courts close at noon Fridays. File in the court location where the Plaintiff filed the Complaint, which is stated on the Summons.

► What are affirmative defenses?

Affirmative defenses are reasons you should win the case instead of the Plaintiff that you state in your Answer. To win the case based on an affirmative defense that you think applies, you will need to prove it to the court at a trial. If you can prove the affirmative defense at trial, you may be able to prove you do not owe the Plaintiff anything or that you owe the Plaintiff less than claimed in the Complaint.

If you think one of these affirmative defenses applies to your case, mark that defense on the Affirmative Defense section of your Answer. The descriptions below match the paragraph number on the Answer form in the "Affirmative Defenses" section.

1. It is not your debt. Sometimes a creditor makes a mistake and sues the wrong person. This could be because there is an error in their records, they have mistaken you for someone else with the same name, or because someone stole your identity and took out debt in your name. If you believe someone stole your identity you can report the theft and create a recovery plan at the Federal Trade Commission webpage: IdentityTheft.gov. To report the theft by phone, call the Federal Trade Commission at 1-877-438-4338 (TTY: 1-866-653-4261).

2. Wrong debt amount listed. Sometimes a creditor makes a mistake about the amount of money owed. If you can prove you paid the whole debt or that the creditor told you that you did not owe any more money, you could win the case. If you can prove that you paid part of the debt, or that there is a mistake about the amount you owe, you will not win the case, but it might mean you owe the Plaintiff less money. If you want to ask the Plaintiff for a detailed accounting of how the total amount was calculated, you may request that through a court process called discovery. You can read more about discovery.

3. Unknown Plaintiff. In some debt cases, the Plaintiff is a company that buys or collects debts. If that is true in your case, the Plaintiff may argue that you entered an agreement with someone else, that you owe that other person or company money, and that the Plaintiff bought the right to collect that money from you. You have a right to make the Plaintiff prove it owns the debt. You can read more about how to make the debt buyer prove ownership.

4. Old Claim. In Alaska, you have to sue someone within 3 years for a debt owed according to a contract. This time limit is called the Statute of Limitations. The time starts running from the "date of default" on the contract, which is usually the day you made your last payment or were supposed to make your first payment. If you have not made a payment in a long time, but then make a payment, the time limit usually starts over from the date you make the payment. There may be a different time limit if you are being sued for a debt that is not based on a contract between you and the other person. You can read the Alaska Statute of Limitations for contracts (see AS.09.10.053) or the statutes about time limits for many types of cases, called “Limitations of Actions” (see AS 09.10).

5. Already Litigated. If you or someone else already had a court case that addressed the debt listed in this case, you cannot be sued again for that same debt. If you are raising this defense, write the case number of the first case and the date it was filed in the Affirmative Defense section of your Answer & Counterclaim to Debt Collection Complaint. If it was not an Alaska case, write down the state where it was filed.

6. Bankruptcy. When a person files for bankruptcy, the bankruptcy court addresses repayment, or forgiveness, of some or all of the person's debts. You cannot be sued over any debt that was part of a bankruptcy case. If you are raising this defense write the case number of your bankruptcy case and the date it was filed in the Affirmative Defense section of your Answer & Counterclaim to Debt Collection Complaint. If it was not an Alaska case, write down the state where it was filed.

7. Improper Sale of Collateral. Some debt cases are about loans that had collateral (like a car loan that is secured by the car - the car is the collateral). If the debtor does not pay the debt, the creditor can take the collateral and sell it. There are rules about selling the collateral. The person selling the collateral has to give the owner notice of the sale and sell the collateral in a "commercially reasonable" manner.

Notice. The creditor must give you written notice of the sale a reasonable amount of time before it sells the collateral, usually 10 days. The notice must include:

Name of debtor and creditor
A description of the collateral
A description of date and time of sale
A warning that if the collateral sells for less than the debt, the debtor may still owe money
A phone number to call for information on the sale and what it would cost to pay the debt and get the collateral back
An offer to provide a full accounting of the debt

See an example of an acceptable notice. (See AS 45.29.614)

Failure to give notice. If the Plaintiff did not give you proper notice, the court will assume the collateral was worth what you owed so you will not owe the Plaintiff any more money. If the Plaintiff wants the court to order you to pay more money, the Plaintiff will have to prove to the court that the collateral was worth less than what you owed by "clear and convincing evidence."

Commercially Reasonable. All parts of the sale of the collateral must be "commercially reasonable."

This generally means that the collateral was sold the way most similar collateral is sold for a price that is what people usually pay for collateral like this.
An example of a sale that is not commercially reasonable might be if the creditor sold the collateral to a close friend for a price much lower than other similar items are usually sold for.
Sometimes collateral is sold to someone who buys a lot of used things at a low price to resell them for a profit, like an auction house or a wholesaler. When that happens, the price is usually lower than what you would pay if you bought the collateral at a store or from a retail dealer. So even if the price is lower than you paid, a court might decide the sale was commercially reasonable.

You can read the statute discussing commercially reasonable sales. (See AS 45.29.610).

If the Plaintiff did not take these steps, you may also have a counterclaim against the Plaintiff, which you can list in the counterclaim section of the Answer form.

8. Payday loans. A payday loan company cannot win a case against you for not paying back a payday loan unless it took these steps before suing you:

Contact you by mail or phone at a reasonable time to try to work things out, including offering the repayment plan described in the next paragraph.
Offer you a repayment plan where you make a down payment and have up to 6 months to repay the loan. They can only add a $30 fee to what you owe.
Send you a certified letter at least 15 days before filing the court case telling you that they are planning to sue you if you do not pay.

You can read the statute that lists these requirements. (See AS 06.50.550).

If the Plaintiff did not take these steps, you may also have a counterclaim against the Plaintiff, which you can list in the counterclaim section of the Answer form.

9. Plaintiff's Performance of the Contract. If the agreement or contract required the Plaintiff to do something before you owed any money, and the Plaintiff did not do their part, you can argue that you should not have to pay. An example would be if you signed a contract to pay the Plaintiff $500 to build a fence in your yard. If the Plaintiff never built the fence, but is suing you for the $500, this defense might apply.

10. Bounced Check. A Plaintiff cannot win a case against you for a check that did not clear, or "bounced," unless it did these things before suing you:

Send you a written notice at least 15 days before starting the case.
Put in the notice that you could avoid court by paying back what you owed on the check plus $30.

If the Plaintiff did not take these steps you may also have a counterclaim against the Plaintiff, which you can list in the counterclaim section of the Answer form.

If the Plaintiff did give you the proper notice, you can still end the case by paying the Plaintiff the amount of the check plus court costs and fees up to $150. This might save you some money if you can afford it because if the case continues and you lose, you may have to pay 3 times the check amount (up to $1,000) plus court costs and fees.

You can read the statute that describes the bounced check procedure. (See AS 09.68.115). Note: If the lender was a payday loan company, this statute does not apply. Look at paragraph 8, above, for the rules about payday loans.

11. Active Military Service. If you are on active duty in the military, or have been released from active duty within the last 90 days, you can ask the court to stop the case for 90 days if your service prevents you from being able to attend or prepare for court hearings. This is called a stay. If you are still on active duty after the 90-day stay, you can ask for another stay. A stay won't end the case or your responsibility to pay the debt, but may delay it when you are on active duty and unable to participate because of your service responsibilities.

If this applies to your case, ask for a stay by attaching to your Answer:

letter explaining why your current service makes you unable to appear and give a starting date for when you will be able to appear; and
letter from your commanding officer stating that your current military duty prevents you from appearing.

12. Other. If you think you have an affirmative defense that is not listed, you can write it in paragraph 12 of the Affirmative Defense section of your Answer.

► Should I argue an affirmative defense?

There are things to consider when you are deciding if you are going to raise an affirmative defense.

You will have to prove an affirmative defense at trial. This means preparing and introducing evidence to support your defense. If you cannot prove your defense, you may not win at trial.
If you lose, you will probably have to pay some or all of the Plaintiff's attorney fees and court costs
You may want to talk to a lawyer about whether you should raise an affirmative defense.
If you don't have an affirmative defense, the Plaintiff may file a Motion for Summary Judgment or Motion for Judgment on the Pleadings that could end the case without a trial. You can read more about Summary Judgment and Judgment on the Pleadings.

► What is a counterclaim?

A counterclaim is a separate legal claim that the Defendant raises against the Plaintiff based on either the same or different facts. If you have a claim against the Plaintiff based on the same facts that the Plaintiff is taking about in the Complaint and you don't list it in your Answer, you might not be able to sue the Plaintiff for it later. A counterclaim could be that the Plaintiff owes you money under a contract or agreement, or that you think the Plaintiff broke some of the laws for collecting a debt or doing business in a fair way. You can read more about possible counterclaims:

Breach of Contract
Violating Fair Business Laws

► What does breach of contract mean?

Breach of contract means someone did not follow the terms of a contract or agreement. If the Plaintiff owes you something under an agreement or contract, you can explain that in the counterclaim section of the Answer form.

One example might be if you and the Plaintiff entered an agreement for the Plaintiff to build you a fence. You agreed to give her $500 before she started and $400 when she finished. Her Complaint says that you paid her $500 and she built the fence, but you did not pay her the second payment, so she is suing you for $400. But she used a different material than you agreed on and the fence blew away during the first storm. You might have a counterclaim against her for the $500 you paid her because you did not get the fence she agreed to build.

Another example could be if the Plaintiff and Defendant also entered into another separate agreement in addition to the one about building a fence. As stated above, the Plaintiff is suing you for $400 because you did not pay her after she finished building your fence. But you also had an agreement that you would detail the Plaintiff's car and she would pay you $100. If you detailed her car and she didn't pay you the $100, you may have a counterclaim for $100.

If you are listing a counterclaim for a breach of a contract or agreement, explain:

the contract or agreement;
how the Plaintiff didn't follow it;
how you were hurt when the Plaintiff broke the agreement (in a debt case this is often that you weren't paid what you were owed).

► What does violating fair business laws mean?

You may have a counterclaim if the Plaintiff did not follow the Federal Fair Debt Collection Practices Act or the Alaska Unfair Trade Practices and Consumer Protection Act that contain rules to protect consumers from unfair debt collection and unfair sales methods. You can read the Federal Fair Debt Collection Practices Act and the Alaska Unfair Trade Practices and Consumer Protection Act .

If you want to tell the court that the Plaintiff violated one of these laws, you have to explain two things to the court:

How the Plaintiff violated the unfair business practices, which is discussed in the next FAQ, below.
How you suffered damage from the Plaintiff's unfair actions. This may be the cost of paper, copying or stamps so you could file your Answer or other costs that you had. Mark the box that explains your costs or explain your costs in the "other" section. List how much you want the court to order the other party to pay you:
- If your costs were less than $167, you can ask to be awarded $500.
- If your costs were $167 or more, you can ask for 3 times that amount (for example, if you had $200 in costs, you could ask for 3 times that, or $600).
- See AS 45.50.531(a).

► What are the types of violations that happen under the fair business laws?

Any violation of trade laws can be a counterclaim. Some examples are listed below. You can talk to a lawyer if you want to learn more about other examples. If you think you have a counterclaim for a violation, you can explain it in the counterclaim section of your Answer form. The descriptions below match the paragraph number on the counterclaim section of Answer form.

1. Debt collector did not give you proper notice. Debt collectors are usually not the person or company you made an agreement with. They are usually collecting a debt you have with someone else. After the first time a debt collector contacts you to try to collect the debt, they must send you the following written information within 5 days:

The amount you owe;
Who you owe (this may have changed from the original creditor if someone bought the debt);
Notice that you have 30 days to disagree in writing that you owe the debt; if you do not disagree in writing within 30 days, the creditor may believe you owe the debt;
Notice that you have 30 days to respond in writing and ask for written proof that you owe the money;
Notice that you have 30 days to respond in writing and ask the name and address of the person or company that you got the debt from in the first place.

If the debt collector did not follow these rules, you may have a counterclaim.

2. Debt collector harassed you. Debt collectors cannot:

Call you about the debt before 8:00 a.m. or after 9:00 p.m.;
Call many times in a short period;
Call but not tell you who is calling;
Call and not explain that any information you give them may be used to collect a debt;
Call your work after being asked not to;
Call someone you know to try to find you and tell them you owe a debt;
Send debt information by postcard;
Tell other people you owe the debt;
Threaten to tell others or hurt you;
Swear at you or use other bad language;
Tell you the government is coming after you unless you pay the debt;
Lie about how much you owe;
Say they are a lawyer when they are not;
Tell you or make you think they are with the government;
Tell you if you don't pay they will sell the debt and then you can't defend yourself;
Tell you that you have committed a crime by not paying and will go to jail;
Threaten to wreck your credit;
Send a letter that looks like it came from the government;
Tell you they have already sued you when they haven't;
Try to collect a debt that is not valid or collect more than you owe;
Continue to bother you if you ask them to stop contacting you (except they can tell you they are stopping or that they plan to sue you).

If the debt collector did any of the above, you may have a counterclaim.

3. Debt buyer cannot prove it owns the debt: If the Plaintiff is a debt buyer it has to prove that it bought the debt. You can read more about what a Plaintiff has to prove. If the Plaintiff filed a lawsuit against you without enough evidence to show that it owns the debt, you may have a counterclaim that it is an unfair debt practice under Alaska law.

4. Plaintiff did not meet the notice requirements for bounced checks: The Plaintiff is supposed to send you a written notice at least 15 days before suing you for a check that did not clear (or "bounced"), stating that you could avoid court by paying back what you owed on the check plus $30. You may have a counterclaim if the Plaintiff did not send you the proper notice. You can read the statute that describes bounced check procedure. (See AS 09.68.115).

5. Payday loan company did not take proper steps: Before filing a court case, a payday loan company must:

Contact you by mail or by phone at a reasonable time to try to work things out, including offering the repayment plan described in the next paragraph.
Offer a repayment plan that gives you up to 6 months to repay after making a down payment on the debt. The only additional fee that can be added for this service is $30.
Send a certified letter to you at least 15 days before filing the court case telling you that they are planning to open a court case if the debt is not paid.

You may have a counterclaim for any step the Plaintiff did not take. You can read the statute that lists these requirements. (See AS 06.50.550).

6. Other: You can write in any other violations you think occurred.

► What is the Offer to Pay section?

If you want to try to work out, or "settle" the case by offering to pay some or all of the debt, you can fill out the Offer to Pay section of the Answer form. This is not the only way to try to settle the case. You can always directly contact the Plaintiff, or the Plaintiff's lawyer if there is one, to talk about settling on your own or through mediation. You can learn more about mediation.

There are several options that you can offer or agree to for resolving your case.

Payment Plan. If you want to pay the debt but cannot afford to pay it in one lump sum, you can offer to pay the Plaintiff according to a payment plan, where both sides sign an agreement that you will pay a specific amount each month for a specific time period.
Reduce the Debt. You can offer to pay a reduced amount that the Plaintiff may be willing to accept (for example, you can explain if you have had a hardship such as medical debt or some other crisis). You would need to discuss your specific situation with the Plaintiff to see if they will agree to reduce the debt.
Reduce the Interest. If the Plaintiff wins at trial, interest may continue to be added to your debt until you have paid the whole debt. In some cases, a Plaintiff will agree to stop adding interest if you enter a settlement agreement.
Pay with your PFD. You can offer to give the Plaintiff the funds from your PFD.
Reduce Attorney Fees and Court Costs. You can ask the Plaintiff to reduce or not ask for you to pay their attorney fees and court costs.
Agree to Pay Without Entering a Judgment Against You: You can offer to pay without the court entering a judgment against you. Avoiding entry of a judgment can help you because a judgment can affect your credit, make it harder to rent somewhere to live, take out a loan, or get a job in the future. In some cases, the Plaintiff enter an agreement without the court issuing a judgment against you. The Plaintiff may require language in the agreement stating the court will issue a judgment if you fail to pay according to the agreement terms.

You can propose a settlement to the other party with:

Debt Settlement Agreement & Order Dismissing Case, CIV-484

It is important to understand that once both sides enter into a settlement agreement that the judge accepts and signs, the case is over. It is very difficult to ask for something different if you change your mind.

► What is exempt property?

If you lose the case, the Plaintiff can execute the judgment and take funds from your paycheck, PFD, or bank account or seize your property to sell it to pay your debt. Some of your property, funds, or income may be exempt which means the Plaintiff is not allowed to take them. The rules are explained in the Judgment Debtor Booklet. If you have exempt income or assets, you may want to tell the Plaintiff about them in your Answer so the Plaintiff will have that information to consider in deciding how to move forward with the rest of the case.

► What happens if I don't file an Answer?

If you have been properly served with the Complaint and do not file an Answer within 20 days then the Plaintiff may file for a default judgment against you. Learn about default judgments.

Consider filing an Answer even if you believe you owe the money the Plaintiff is requesting. This will give you time to talk to the Plaintiff about entering into a settlement such as arranging a reasonable way to pay such as a payment plan, or discuss options like reducing your interest. This could prevent the Plaintiff from seizing your property or taking money from your bank account, your PFD and your paycheck when you do not expect it and could prevent an entry of "default judgment" on your record.

► What happens after the Defendant files the Answer?

If the Defendant files an Answer and raises a claim against the Plaintiff, called a counterclaim, the Plaintiff can file an Answer to Counterclaim to agree or disagree with any counterclaims raised within 20 days. The Defendant should not respond to the Answer to Counterclaim. The Answer to Counterclaim should be the final pleading and the case will proceed.

After the pleadings are filed, there are 3 ways that the case can resolve:

The parties can reach a settlement by working out an agreement without having a trial. This can be done between the parties or with the help of a third party such as a mediator or a settlement judge. Parties can reach an agreement at any time before the trial.
The parties can have a trial where the judge or jury (if there is one) will make a decision based on both parties' arguments and supporting evidence.
By the court granting a Motion for Summary Judgment or a Motion for Judgment on the Pleadings. If both parties agree on the facts, either party can file a Motion for Summary Judgment or a Motion for Judgment on the Pleadings. Either motion may end the case in favor of the party that filed it. The other party can tell the court it disagrees with the facts by filing an Opposition to Motion for Summary Judgment or Opposition to Motion for Judgment on the Pleadings. But if both parties agree on the facts, the court will decide how to end the case after reading the motion. You can read more about Summary Judgment and Judgment on the Pleadings.

If the case doesn't settle right away, you will receive an order from the court giving a date for a Pre-trial Conference or a Trial Setting Conference. The document that tells you about the first time to come to court may have different names, but usually the main purpose is so the judge can:

Ask about the status of the case. The judge is interested in understanding if the parties have reached an agreement or the case needs to be set for a trial.
Ask if the parties have tried to settle the case.
Ask if the parties have exchanged discovery.
Ask if the parties are interested in mediation or a settlement conference if the court offers those services to avoid a trial.
Pick a date for trial.
Pick a date for a hearing about a week or two before trial to make sure everyone is ready for the trial.

At the conference, you may:

ask the judge questions about the process.
tell the judge if you have a conflict with the proposed trial date.
tell the judge if you are having trouble talking to the other party about settling the case.

This conference is NOT for:

arguing your side of the case, or
presenting evidence.