April 06, 2021
Summary: Have you already been served with papers but still want to settle your debt? Find out if that's possible now that you've already been served.
If you were served with a Summons and Complaint filed by a debt collector in a court of law, do not throw your hands up in despair out of fear that you will be reprimanded and embarrassed by a judge or jury. Receiving notice that a debt collection lawsuit was filed does not mean all communications are halted with the debt collector. You may still be able to negotiate a settlement on the outstanding debt before having to appear in court or present your case at a trial.
When you are served with a debt collection lawsuit, it may make sense to proactively contact the creditor or debt collector to assess the viability of engaging in potential settlement discussions. It is important to keep in mind that many creditors and debt collection agencies generally prefer to resolve delinquent debt issues outside of court. Why? Because most debt collection lawsuits are time-consuming and cost-prohibitive. As a result, there is a good chance that the debt collector may be open to negotiating with you to reach an amicable settlement.
When you receive the Summons and Complaint filed by the debt collector, do not immediately rush to contact the debt collector with a desperate plea to have them accept a settlement. You have time before even needing to consider whether it makes sense to engage in settlement discussions. When served with the lawsuit, the first step is to file a formal response (known as an Answer).
Do not ignore the lawsuit. This is extremely important since an overwhelming majority of individuals in this situation opt to simply ignore the lawsuit and pretend as though it does not exist. This will typically lead to the debt collector securing a default judgment against you. Once a default judgment is entered, the debt collector will be authorized to garnish your wages, gain access to your checking accounts, and even potentially seize certain assets.
When you are served with the Summons and Complaint, take the time to thoroughly review the lawsuit. Why? Because it is quite common for debt collection companies to misfile collection lawsuits or sue the wrong people for debts they do not owe. These types of errors are especially common when the plaintiff identified in the lawsuit is a debt buyer like Portfolio Recovery Associates. These types of companies focus exclusively on purchasing charged-off accounts and unpaid debts from other creditors and financial institutions for pennies on the dollar. They make these purchases under the assumption that their team of debt collectors will have some success in getting consumers to pay, at the very least, a portion of the outstanding balance.
However, these debt purchases are risky because the information transferred by the previous creditor may not be accurate and may even contain major errors. As mentioned, it is fairly common for a debt collection agency that specializes in the purchase of old debts to wind up suing the wrong person in court, or filing a lawsuit without any actual evidence that the consumer owes the amount alleged in the Complaint. This is why you should invest the time in reviewing the lawsuit to see if there are any mistakes or errors.
For example, you should attempt to determine the age of the alleged debt identified in the Complaint. If you are the actual person who had this delinquent account, you should also check your records to see when you last made a payment. Why? Because there is a statute of limitations in place for how long a consumer can be sued by a debt collector for payment on a debt. If the delinquent debt identified in the lawsuit is older than the applicable statute of limitations, you could get the lawsuit dismissed.
If it turns out that you do owe the debt identified in the lawsuit, you should file your Answer to the Complaint and subsequently contact the debt collector to discuss a potential settlement. In many instances, settlement negotiations would revolve around you offering to pay a portion of the outstanding amount with a lump-sum payment or in monthly installments. You should be prepared to engage in a back-and-forth negotiation with the debt collector since they will want to try and collect as much as possible. Nevertheless, it may be possible to achieve a reasonable settlement and avoid having to go to trial.
If you were served with a lawsuit related to an unpaid debt, there remains the possibility of engaging in negotiations with the debt collector (identified as the plaintiff in the lawsuit) to try and reach an amicable out-of-court settlement. Whether you can successfully settle will depend on a variety of factors unique to your particular case.
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
Here's a list of guides for other states.
Being sued by a different debt collector? We're making guides on how to beat each one.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.