Sarah Edwards | December 01, 2022
Summary: Thinking about rejecting a settlement offer? You may want to make a counteroffer. If you reject a settlement offer, or fail to keep up with a payment arrangement, your creditor might take you to court. Learn what you need to know about settling a debt and responding to a debt lawsuit from SoloSuit.
Have you received a settlement offer from a creditor or debt collection agency? If so, you have a choice to make. You can accept the offer, counter with an offer of your own, or ignore the communication.
Typically, debt collectors and creditors make a settlement offer when someone seems to have difficulty repaying a debt.
For example, if you suddenly stop making payments on a loan, the creditor will worry that you’ve lost your job or have other financial problems.
Your creditor might attempt to get you back on the right financial track by offering you a new payment arrangement or a settlement. Once you receive the offer, the ball is in your court, and you must decide your next steps.
If you can’t afford to pay your creditor the settlement they offer you, you’ll need to reject it. Just like you wouldn’t buy a home well outside your mortgage parameters, you shouldn’t agree to a settlement you know you can’t pay.
However, you can make a counteroffer instead of rejecting the settlement outright. For instance, suppose that your creditor offers you a settlement for a lump-sum payment of 75% of the value of your debt. You could counter with an offer you can better afford, like 45% of the debt. Your creditor will then decide whether to accept your offer or counter with another offer.
Let’s take a look at an example.
Example: Jason is being sued by a debt collector for a credit card debt of $4,000. At the moment, Jason can afford to pay off $3,500 in a lump-sum payment. He responds to the lawsuit with a SoloSuit Answer document. Then, he uses SoloSettle to send a debt settlement offer, asking the debt collector to settle for $2,000. The collector sends a counteroffer, and the two parties negotiate until they reach a settlement of $3,200. Jason saves money and avoids having a judgment entered against him in court.
Solosuit can help you respond to debt collection lawsuits quickly and easily.
If you can’t reach a settlement agreement with your creditor, they’ll likely stop the negotiation process. Instead, they may offer a monthly payment arrangement that doesn’t require as much up front from you. They may offer low monthly minimum payments until you repay the debt.
Consumers who can’t afford to settle with their creditors should accept a payment arrangement. A payment arrangement protects you from a lawsuit while also giving you time to save more money toward a settlement.
If possible, pay double or triple the amount of your minimum payment to eliminate the debt quicker. Taking on a short-term, part-time job or starting a side hustle can help you bring in some extra income. Put as much money as you can toward your debt repayment.
If you don’t stick with your payment plan, your creditor may tire of trying to accommodate you. They may decide to pursue the debt through a lawsuit. If they begin a legal claim against you, you’ll need to repay the debt or settle with them to avoid a judgment.
A judgment will allow your creditor to take specific actions against you, including garnishing your wages, freezing your bank account, or seizing certain assets. An open judgment can prevent you from obtaining new credit or finding a new job. It’s best to avoid a judgment if at all possible.
File an Answer to debt collection lawsuits with SoloSuit.
Yes, you can attempt to defend yourself from a judgment in court. However, you’ll need to show the judge why you don’t owe the debt or why the claim doesn’t apply to you.
To start your defense, you’ll need to reply to your creditor’s Complaint with an Answer.
In an Answer, you refute the claims against you. You may argue that the debt is past your state’s statute of limitations on debt or you were an authorized credit card user.
Sometimes, people don’t find out about debt until they receive notice of a lawsuit. In that case, they may be a victim of identity theft. Identity theft victims should file complaints with the FTC and their local police precinct.
You’ll need to file your Answer following your local court’s rules. You should also send a copy of the Answer to your creditor.
On your court date, you’ll appear before a judge to answer questions and present your case. The judge will decide whether a judgment is appropriate or not. If you win the case, you’ll avoid further legal claims from your creditor.
SoloSuit can help you draft and file an Answer in all 50 states.
Check out this video to learn more about what to include in your Answer to a debt collection lawsuit:
If your creditor wins a judgment against you, they’ll typically take immediate action to garnish your wages or freeze your bank account. If the creditor garnishes your wages, you’ll lose a portion of your income until you fully repay the loan.
Consumers who receive a judgment for a loan with collateral, such as a car, will likely lose the vehicle. The court’s decision will allow the creditor to seize any assets used as collateral.
It’s always best to avoid judgments involving loans and creditors. Doing so eliminates the potential for future financial headaches and legal issues.
Avoid losing by default judgment with 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.
>>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.)
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.
Is your credit card company suing you? Learn how you can beat each one.
Going to Court for Credit Card Debt — Key Tips
How to Negotiate Credit Card Debts
How to Settle a Credit Card Debt Lawsuit — Ultimate Guide
Need more info on statutes of limitations? Read our 50-state guide.
Why do debt collectors block their phone numbers?
How long do debt collectors take to respond to debt validation letters?
What are the biggest debt collector companies in the US?
Is Zombie Debt Still a Problem in 2019?
If a car is repossessed, do I still owe the debt?
Is Portfolio Recovery Associates Legit?
Is There a Judgment Against Me Without my Knowledge?
Should I File Bankruptcy Before or After a Judgment?
What is a default judgment?— What do I do?
Summoned to Court for Medical Bills — What Do I Do?
What Happens If Someone Sues You and You Have No Money?
What Happens If You Never Answer Debt Collectors?
What Happens When a Debt Is Sold to a Collection Agency
What is a Stipulated Judgment?
What is the Deadline for a Defendants Answer to Avoid a Default Judgment?
Can a Judgement Creditor Take my Car?
Can I Settle a Debt After Being Served?
Can You Appeal a Default Judgement?
Do I Need a Debt Collection Defense Attorney?
Do I Need a Payday Loans Lawyer?
Do student loans go away after 7 years? — Student Loan Debt Guide
Am I Responsible for My Spouses Medical Debt?
Should I Marry Someone With Debt?
Can a Debt Collector Leave a Voicemail?
How Does Debt Assignment Work?
What Happens If a Defendant Does Not Pay a Judgment?
How Does Debt Assignment Work?
Can You Serve Someone with a Collections Lawsuit at Their Work?
How Many Times Can a Judgment be Renewed in Oklahoma?
Does Debt Consolidation Have Risks?
What Happens If You Avoid Getting Served Court Papers?
Does Student Debt Die With You?
Can Debt Collectors Call You at Work in Texas?
How Much Do You Have to Be in Debt to File for Chapter 7?
What Is the Statute of Limitations on Debt in Washington?
How Long Does a Judgment Last?
Can Private Disability Payments Be Garnished?
Can Debt Collectors Call From Local Numbers?
Does the Fair Credit Reporting Act Work in Florida?
The Truth: Should You Never Pay a Debt Collection Agency?
Should You Communicate with a Debt Collector in Writing or by Telephone?
What Happens After a Motion for Default Is Filed?
Can a Process Server Leave a Summons Taped to My Door?
Need help managing your finances? Check out these resources.
How to Make a Debt Validation Letter - The Ultimate Guide
How to Make a Motion to Compel Arbitration Without an Attorney
How to Stop Wage Garnishment — Everything You Need to Know
How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)
Defending Yourself in Court Against a Debt Collector
Tips on you can to file an FDCPA lawsuit against a debt collection agency
Advice on how to answer a summons for debt collection.
Effective strategies for how to get back on track after a debt lawsuit
New Hampshire Statute of Limitations on Debt
Sample Cease and Desist Letter Against Debt Collectors
The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah
West Virginia Statute of Limitations on Debt
What debt collectors cannot do — FDCPA explained
Defending Yourself in Court Against Debt Collector
Arkansas Statute of Limitations on Debt
Youre Drowning in Debt — Heres How to Swim
Help! Im Being Sued by My Debt Collector
How to Make a Motion to Vacate Judgment
How to Answer Summons for Debt Collection in Vermont
North Dakota Statute of Limitations on Debt
ClearPoint Debt Management Review
Indiana Statute of Limitations on Debt
Oregon Eviction Laws - What They Say
CuraDebt Debt Settlement Review
How to Write a Re-Aging Debt Letter
How to Appear in Court by Phone
How to Use the Doctrine of Unclean Hands
Debt Consolidation in Eugene, Oregon
Summoned to Court for Medical Bills? What to Do Next
How to Make a Debt Settlement Agreement
Received a 3-Day Eviction Notice? Heres What to Do
How to Answer a Lawsuit for Debt Collection
Tips for Leaving the Country With Unpaid Credit Card Debt
Kansas Statute of Limitations on Debt Collection
How to File in Small Claims Court in Iowa
How to File a Civil Answer in Kings County Supreme Court
Roseland Associates Debt Consolidation Review
Do Debt Collectors Ever Give Up?
Can They Garnish Your Wages for Credit Card Debt?
How Often Do Credit Card Companies Sue for Non-Payment?
How Long Does a Judgement Last?
How Long Before a Creditor Can Garnish Wages?
How to Beat a Bill Collector in Court
Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.
"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather