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Can I Still Settle a Debt After Being Served?

George Simons | December 06, 2023

Edited by Hannah Locklear

Fact-checked by Patrick Austin, J.D.

Summary: Yes, you can settle after service. The best way to settle a debt lawsuit is first to file a response, then contact the otherside and make an offer. You can use SoloSuit to respond in just 15 minutes. This gives you the leverage you need to settle.

Frequently, people get sued out of the blue by debt collectors. If you don't respond to the lawsuit, you'll automatically lose your case and the debt collectors can take back 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 negotiate a settlement with the collector.

Why have I been served?

If you have been served a Summons for debt collection, it's probably because you have not paid a debt. However, according to research by the Consumer Financial Protection Bureau, there is actually a high chance you don't really 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.

In most states, if you are being sued for debt, you will be served a Summons and Complaint. These are the legal documents that initiate a debt lawsuit case. The Summons notifies you that you are being sued, and 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.

We hear it all the time 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. When you don't respond, collectors can file a default judgment against you. If granted by the court, the default judgment gives collectors the legal authority to garnish your wages, seize your property, etc.

You can avoid default judgment by filing an Answer with the court and reaching out to the collector to negotiate a settlement.

Can I settle my debt after being served?

Technically, you can reach out to the party suing you to discuss a payment plan at any time. However, there are certain tips and tricks that will help you reach the ideal settlement for you.

So, yes, you can settle a debt after being served, but make sure to file your Answer first. Here's why

What are my options after being served?

You have a few options when you are served:

  • File an Answer — This is likely to be, depending on your unique circumstances, the best option. Filing an Answer prevents the court from filing a default judgment against you. 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, there is a good chance you may automatically lose. Doing nothing typically results in the debt collector filing a Motion for Default Judgment against you. After that, the collector can take your money directly from your paycheck or bank account.
  • Do something invalid — Doing something invalid is surprisingly common and has effectively the same result as doing nothing. Invalid actions include: filing the Answer improperly, admitting everything in your 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.

How to win a debt collection lawsuit flowchart. Litigation Flowchart.

So, to be clear, you should always file your Answer before settling.

Check out this video where SoloSuit's CEO explains how to settle a debt in 3 simple parts:

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.

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 to 31 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.

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.

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.

Make an offer

After filing an Answer, you can settle with the collector by sending an offer with SoloSettle

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.

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.

You can make a settlement offer in minutes with SoloSuit.

Watch SoloSuit pay off one of our customer's debts by negotiating a settlement:

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 pre-trial requests. A bare-minimum response will likely be sufficient to continue the negotiation process and, hopefully, reach an amicable settlement.

What is SoloSuit?

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.

Settle with SoloSettle

Make an Offer



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

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

What If I Haven't Been Sued Yet?

If you've only received a collections notice, but not a lawsuit, the best way to respond is with a Debt Validation Letter. When a debt collector contacts you in any way, whether it's by phone or mail, you can respond with a Debt Validaiton Letter. This letter notifies the collector that you dispute the debt and requires they provide proof you owe the debt. They can't call you or continue collecting until they provide validation of the debt.

Learn more about the Debt Validation Letter here.

Get started with a Debt Validation Letter here.

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