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Resolve Your Collection Lawsuit in 3 Steps

Hannah Locklear | September 01, 2023

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Are you being sued by debt collectors? If so, there are easy steps you can take to resolve your debt, such as responding to the collection lawsuit, negotiating a settlement, and getting your agreement in writing. SoloSuit can help you with each of these steps and more.

Being served with a collection lawsuit can be an intimidating and stressful experience. While your first instinct might be to ignore it, doing so could lead to even worse financial repercussions, including default judgments that might garnish your wages or seize your assets. However, there are some practical steps you can take to handle this situation effectively. Below, we outline three key steps to resolve your collection lawsuit.

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Step 1: Respond to the collection lawsuit before your deadline

The first step in handling a collection lawsuit is to respond promptly. Once you've been served, there's typically a limited time frame—anywhere from 14 to 35 days—to file an Answer to your collection lawsuit with the court. Failure to do so may result in a default judgment against you, which could entail wage garnishment, bank levies, and other unpleasant outcomes.

Follow these tips to respond to your collection lawsuit:

  1. Read the court documents carefully. When you get sued, you’ll receive court documents that notify you of the case and the specific claims that are being raised. These documents are called the Summons and Complaint (also known as a Petition in some states). Before you do anything, be sure to review these documents carefully. Ensure you understand what the lawsuit is about, the amount being claimed, and who is suing you.

  2. Draft an Answer document. To respond to your collection lawsuit, you must draft a response to the Summons and Complaint. This response is called an Answer, and it is the formal document that presents your defenses to the claims made in the lawsuit. In your Answer, you should address each claim against you. You can admit, deny, or deny due to lack of knowledge. You should also include a section for affirmative defenses, where you get to include any legal reasons that you should not be held liable for the debt.

  3. File your Answer. After drafting your Answer, you should file the document into your case. You can do this by mailing it to the court, dropping it off at the courthouse, or filing electronically (only some courts offer this service, and for others, it’s mandatory). Be sure to file your Answer before your state’s deadline.

  4. Serve the plaintiff. Once your Answer is prepared and filed, you'll need to ensure it gets served to the entity that filed the lawsuit against you, often a collections agency or law firm. Procedures for this can vary by jurisdiction, so consult local court rules or your attorney for guidance. Typically, it is enough to send your Answer to the plaintiff via certified mail.

SoloSuit can help you draft and file a customized Answer to your debt collection lawsuit.

Step 2: Negotiate a settlement

If you owe the debt but can't pay in full, you may want to consider negotiating a settlement.

In a debt settlement, you offer a portion of the total amount due, usually 60% or more of the debt’s value. In exchange for a lump-sum payment, the debt collector agrees to drop any legal claims against you and release you from the remaining balance.

Before negotiating, get a full understanding of your financial situation. Know how much you can afford to offer as a lump sum or in monthly payments. Contact the opposing counsel or collections agency to discuss settlement options. Make your offer by starting with a lower amount than what you can afford to pay, leaving room for negotiation. Be prepared for counteroffers and decide in advance what your limit is. Make sure you know if the settlement covers the entire debt or if there are any additional fees, interests, or costs that you will have to pay.

SoloSettle can help you negotiate your own debt settlement.

Step 3: Get the settlement agreement in writing

Once both parties have agreed on a settlement, it's crucial to get the terms in writing.

Typically, the collection agency or law firm will draft a settlement agreement that outlines the terms, including the amount to be paid and the payment schedule. You should review the agreement carefully before signing. Make sure it includes a clause that the creditor will report the debt as "settled" or "paid" to credit bureaus.

Both you and the representative of the creditor should sign the settlement agreement. Keep multiple copies for your records. Stick to the payment schedule and terms outlined in the settlement agreement to avoid further legal complications.

Finally, ensure your credit report is updated. After you’ve completed the payment, make sure to check your credit report to confirm that the debt is marked as "settled" or "paid."

By taking these steps seriously and acting promptly, you can resolve your collection lawsuit in a way that minimizes its impact on your financial future. Legal processes can be complicated and stressful, but you do have options and strategies for navigating through them successfully.

Resolve your collection lawsuit with the help of SoloSettle

SoloSettle, powered by SoloSuit, can help you with each of these three steps and more. As a tech-based approach to debt settlement, our SoloSettle software helps you send and receive settlement offers until you reach an agreement. You can end up saving hundreds—maybe even thousands—through debt settlement.

Plus, SoloSuit has recently partnered with a law firm to provide our SoloSettle Premium services, which gets you full legal representation in your case on top of expert debt settlement negotiations. You won’t have to worry about responding to any other collection lawsuit documents because our partnering law firm will draft and file any other necessary responses and appear in court for you.

To learn more about how to negotiate a debt settlement, check out this video:

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.

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

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