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Can I Settle a Debt After Being Served?

George Simons | December 12, 2023

Edited by Hannah Locklear

Summary: Yes, you can settle after being served. The best way to settle a debt lawsuit is first to file an Answer, then to contact the other side and make an offer. You can use SoloSuit to respond to a debt lawsuit in just 15 minutes and send a settlement offer with SoloSettle.

Frequently, people get sued out of the blue by debt collectors. We hear it frequently from our customers: "I didn't even receive a collections notice!" Collectors do this because they are banking on you not responding to the lawsuit.

If you don't respond to the lawsuit, you'll automatically lose your case and the debt collector can collect the debt directly from your bank account or your paycheck. For people who actually owe some portion of the debt, usually the best move is to respond to the lawsuit and then angle for a settlement.

That's why we made SoloSuit: to make it easy for people to respond to debt collection lawsuits. Hiring an attorney to respond to the lawsuit isn't usually financially feasible, so with SoloSuit, we do it all for you. You can use us to respond to the lawsuit and then settle your debt. So, yes you can settle a debt after being served: it's actually arguably the best time to settle it. When you try to settle, consider these tips.

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Why have I been served a Summons and Complaint?

If you have been served, then it is possibly because you have not paid a debt. According to research by the Consumer Financial Protection Bureau, there is actually a very high chance you don't actually owe the debt at all. If you do owe the debt, a lawsuit is usually the creditor's last resort and it means that you have avoided paying a bill for quite a while.

The summons is essentially your creditor telling you that they no longer want to continue asking you to pay your bills—they want to force you to pay them.

In most states, you are served when you receive a Summons and Complaint document. The Summons tells you that you are being sued. The Complaint tells you why you are being sued. You may be served these documents personally: meaning someone hands them to you. You can also be served these documents in the mail. You may also never be served at all, but through a process called "sewer service" the lawsuit is still filed against you.

What are my options if I have been served?

You have a few options when you are served.

  • File an Answer — This is the best option in nearly every situation. Filing an Answer document is the proper response to being served a Summons and Complaint. Filing an Answer protects you from default judgment, or losing automatically. It also puts you in a position of power, giving you leverage to settle your case. Even if you owe the debt, or if the statute of limitations has expired, you should still file an Answer.
  • Do nothing — If you do nothing then you will lose. The collector will file a Motion for Default Judgment and then you will lose automatically. After that, the collector may take your wages and your property.
  • Do something invalid — Doing something invalid is surprisingly common and has the same result as doing nothing. Invalid actions, or actions that are bad, include filing the Answer improperly, admitting everything through the Answer, calling the collector without filing an Answer, getting a settlement without filing an Answer, and responding to the collector with the wrong document, like a letter.

The first two options are shown below in this diagram of paths to win a debt collection lawsuit. As it shows, If you file an Answer, you can angle for settlement; if you don't you'll lose by default. Paying the debt without filing an Answer isn't a good idea. If you pay the debt without filing an Answer, the collector can go behind your back and file for default judgment; then the collector can lie, saying they never received payment, and garnish your wages to collect the debt twice.

Filing an Answer gives you basic protection. Filing for bankruptcy by itself also isn't a good option at this point. If you file for bankruptcy without responding to the lawsuit, then the collector can win and take the entire debt from your wages before you even start the bankruptcy filing.

Debt Collection Lawsuit Flowchart

What should I do first after being served?

The moment you are served the clock starts ticking, meaning you have minimal time to respond before matters get worse. Despite this, after being served, the first thing you should do is stay calm. Next, you should go through the following steps to ensure that you settle your debt after being served.

  1. Respond immediately.
  2. Check to see if you are legally liable.
  3. Examine your finances.
  4. Make an offer.
  5. Continue to defend yourself.

Now, let’s break down each of these steps a little further. If you don’t like reading, check out the videos below.

1. Respond immediately

It is essential to respond to a Summons immediately. This will ensure that you have a better chance to settle your debt after being served. The deadline to respond varies from state to state, but it ranges from 14-35 days. If you miss your opportunity to file an Answer to being served, then the debt collector may file for a default judgment. This will prompt wage garnishment, and you will no longer be able to negotiate your debt.

SoloSuit makes it simple to respond the right way.

Let’s consider an example.

Example: Ben is being sued by a debt collector. He uses SoloSuit to respond to the lawsuit and have an attorney review his documents. In his Answer, Ben denies all the allegations listed in the Complaint document. When the debt collector receives Ben’s Answer, they realize that it would cost more to continue the case than the debt is worth. They request a dismissal, and the court grants it. Ben is home free!


To learn more about how to respond to a debt collection lawsuit, check out this video:

2. Check to see if you are legally liable

Look through all of the papers that you have been served with. Verify whether you do in fact owe money to the company that is attempting to collect a debt from you. Ask yourself a few questions:

  • Did you borrow money from this company or do you owe them money on a loan?
  • Is the amount that you are being sued for the same amount that matches with your own records?

This is not a question of if you can pay the debt, but simply a question of it you are legally liable to pay for it.

3. Examine your finances

Once you understand what amount you owe, it is important to understand what the creditors can legally take from you if they obtain a judgment.

If you own your home, then this is one item the creditors may be able to claim in a judgment. If you rent your domicile, then this is not something to worry about.

Creditors do have the option to freeze your bank accounts and garnish your wages. It is a good idea to calculate how much the creditors may be able to take in wage garnishment. This will not only allow you to prepare, but it may be able to ease your mind as well.

If the only income you receive is from Social Security, then in some states your accounts cannot be legally frozen, and there is nothing for them to come after for the moment.

Determine how much money you can afford to settle for. The most enticing settlement offers for collectors are lump sum payments. If you are able to pay a lump sum payment, you will pay less than you would with a monthly payment plan. Determine how much you can afford to pay as a lump sum payment and prepare to offer it for settlement.

4. Make an offer

If you are dealing with a debt buyer — someone who bought your debt from the original creditor — then they will probably accept a settlement between 1%–50% of the amount they're suing you for. On average, debt collectors buy debts for 8 percent of the face value of a debt. Meaning if they settle for 10 percent of the debt, they will earn 2 percent. If you are dealing with the original creditor, they will be less willing to settle for a low amount. You may be able to settle for 20%-70% of the debt.

Note that debts settle for a wide range of amounts. You can't expect to settle for any given percentage because there are many factors that play into how much collectors and creditors are willing to settle for.

You might be wondering how to negotiate credit card debt settlement yourself? Well, first you have to put together a realistic offer based on your finances and the debt itself. If you are struggling to come up with the money look at your valuable possessions. What can you sell that would not be detrimental to your life?

If you can't afford a lump sum payment, then monthly payments may be your best option.

Let’s take a look at another example.

Example: Samuel owes a credit card debt, and after several months of missed payments, the account is transferred to collections. Debt collectors start calling, but Samuel isn’t sure what to do. He finds out he is being sued a few months later when someone hands him a Summons at his door. Samuel uses SoloSuit to draft and file an Answer to the lawsuit, giving himself time to work out a settlement plan. Next, he uses SoloSettle to start the settlement negotiation process. He offers to pay a lump-sum of 50% of the debt. After a few rounds of negotiations, he reaches a settlement with the collectors of 75% of the original debt amount. In the end, SoloSettle helps Samuel save money, avoid going to court, and give himself a financial reset.


The video below explains three steps to follow to negotiate and reach a debt settlement:

5. Continue to defend yourself

After you respond to the lawsuit and make a settlement offer, the collector may refuse to settle and, instead, continue to the next phase of the lawsuit. Usually, this phase is discovery. You know your lawsuit has progressed to discovery if you receive a Request for Response to Admissions or Interrogatories.

To defend yourself in this stage, you need to file a response to these documents. A bare-minimum response will likely be sufficient to continue driving for a settlement. Each time you respond to new documents in the lawsuit, it increases the costs for the collector and increases the likelihood they will settle.

Settle your debt once and for all with SoloSettle.

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What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

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"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


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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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