Sarah Edwards | November 22, 2022
Summary: If you are dealing with a debt lawsuit in California, you can reach out to negotiate a debt settlement offer at any stage of the case. First, file your Answer to the lawsuit, then send a settlement offer. When an agreement has been reached, get it in writing. SoloSettle can help you negotiate your own debt settlement offer and settle your California debt fast.
Getting sued for a debt in California is stressful. You have to respond to the lawsuit, and it’s usually difficult to find an attorney to take on your case.
When you know you owe a debt, and you want to settle it once and for all, you have options. Most creditors and debt collectors are willing to accept a settlement for less than you originally owed. In fact, the average debt settlement in the US is 50% of the original debt amount.
If you’re looking for a way to get rid of your debts in California, we have answers.
You can reach a debt settlement with your creditor or debt collector in California on your own with SoloSettle and avoid having to hire a debt settlement company.
Now, let’s take a closer look at each step. Check out this video to learn more about the debt settlement process:
You're likely worried if you’ve received notice of a debt lawsuit against you in California. No one wants to be the subject of a legal claim, and few people relish sharing their financial difficulties with a judge. However, it is possible to settle your debt lawsuit without going to court.
If you are being sued for a debt in California, you must file your initial response to the lawsuit by submitting an Answer document to the court and opposing party before California’s deadline, which is 30 days.
Even though you plan to settle the debt before your court date, filing an Answer prevents the court from granting a default judgment against you. You should avoid a default judgment at all costs, because it can lead to wage garnishment and seizure of your property.
Before starting your settlement negotiation, file an Answer in response to the creditor or debt collector’s Complaint. Address each claim listed in the Complaint by admitting, denying, or denying due to lack of knowledge.
For instance, you might contest the amount of money the creditor or collector is seeking from you or their right to file a lawsuit against you.
Learn more about how to respond to a debt lawsuit in California here.
Once you’ve responded to the lawsuit, you’re ready to reach out to the creditor or debt collector with your first settlement offer.
Since each debt account and circumstance is unique, there isn’t really a settlement percentage that works as a standard for all cases. So, in order to make your first offer, you’ll need to do two things:
Calculate how much money you have left over each month after you pay for the basics: food, shelter, utilities, and transportation. Subtract other costs that must be paid like other non-delinquent debt. Add the difference to any savings you have available to pay off this debt. The sum is the amount you have available to pay off the debt.
Amount available to settle = (monthly income – monthly costs) + savings
Debts settle within a broad range of amounts. They can settle for amounts ranging from 1% to over 100% of the total amount of the debt. According to America Fair Credit Council’s Regan Report, the average consumer can reach a debt settlement of 50% when working with a debt settlement company.
All of that said, a 50% settlement is not easy to get. We don’t see it much. An 80% settlement is easy in most cases, as most creditors and debt collectors are willing to drop to that amount. Usually, we see debts settle for somewhere within that range. Around 60% is pretty common.
Ultimately, debts settle for a very broad range of amounts. How much the debt actually settles for depends on the answers to a variety of questions:
Ask yourself these questions about your debt to have a better idea where to start with your negotiations. Here’s a little idea of what you could say in your initial offer:
“I see you’re suing me for [$500] for [case number]. I don’t have that kind of money and I don’t agree with the amount. But I do have [$250] that I can pay within 30 days to settle the debt in full. Let me know if you accept.”
Now, let’s look at an example.
Example: Jesse decides he has $3000 available to pay off a $4000 debt, and he thinks the collector will accept 50%. He uses this reasoning to pick a number in the middle and offer it to the collector. Jesse sends a debt settlement offer of $2,500, leaving him some wiggle room to negotiate.
As with most communications you have with creditors, debt collectors, and their attorneys, you should make all your offers in writing and, when reached, be sure to get the settlement agreement in writing too.
This will prevent any sneaky debt collection behavior in the future, and it will protect you in case they go back on their word.
Here’s a real sample of a settlement agreement document:
Read a full debt settlement agreement here.
SoloSettle’s goal is to empower you to negotiate and reach a debt settlement on your own.
SoloSettle makes negotiating easy by providing a structured process.You can use our web-app to send and receive offers from collectors. It will draft offers for you and protect you from the potential lies and bullying of debt collectors. Most importantly, SoloSettle makes sure all of the proper legal language is included to protect your rights when communicating with the creditor or debt collector. When a settlement agreement is reached, SoloSettle manages the settlement agreement documentation for you and protects your sensitive financial information from the collectors, preventing them from over-charging you.
Check out this review from a real SoloSettle customer:
“I'm very thankful for SoloSettle.. Having a third party negotiate the settlement was instrumental in resolving this case and saved me from two giant headaches: 1) I didn't have to deal with the plaintiff's lawyer and 2) I didn't have to go to court. I also love that the payment was processed through SoloSettle. I was nervous about sharing my personal financial data with the other side, but SoloSettle protected that for me. I hope I never get sued again, but if I do, I would use SoloSettle again in a heartbeat.
SoloSettle really saved me a ton of time and heartburn and kept me from having to be my own lawyer in court.”
California is known for its sunny weather, its long coastline along the Pacific Ocean, and the star-studded city of Los Angeles. However, it’s also an expensive place to live. According to a 2022 cost-of-living survey, California is the third-most expensive state, falling behind only Hawaii and New York.
Housing costs are extreme in California. Buying a single-family home in the state will set you back an average of $708K—more than double the national average of $303K. Gas is also notoriously more expensive in California than in other states.
The average California household carries $8,505 in credit card debt. That’s unsurprising, given the high cost of living. Many families rely on credit cards when they don’t have enough savings to cover unforeseen expenses. If they can’t pay off the balance quickly, credit card debt will start to take a big bite out of their monthly income
Luckily, if you’re a Californian struggling with debt, you can settle your debt and find the financial freedom you’re seeking.
Debt settlement is an option for people who’ve fallen behind on bills and don’t see a way out of their financial difficulties. Under a debt settlement agreement, you’ll pay a portion of the original obligation as a lump sum, and the creditor agrees to wipe out the remainder of your debt.
Many debt settlement companies can provide you with a structured plan for debt settlement and handle the negotiations with your creditors. Debt settlement organizations usually charge a percentage of some amount involved in the negotiation, like the total debt amount or the total settlement amount..
Typically, the amount paid for debt settlement assistance is 25% of the total value of your debt.
You can attempt to settle your outstanding obligations with your creditors yourself. This strategy can work if you already have some money saved and feel comfortable bargaining in high-pressure negotiations with debt collectors or other creditors.
If you choose to work with a debt settlement company or agency, be sure to learn about your rights as a consumer first. Under the California Fair Debt Settlement Practices Act (AB-1405 Debt settlement practices), which was passed in 2021, debt settlement companies cannot:
Any debt settlement company that is found in violation of the California Fair Debt Settlement Practices Act may be held responsible for statutory damages between $1,000-$5,000 per violation, as determined by the court.
You can avoid having your rights violated by scammy debt settlement companies, and work out a debt settlement agreement on your own with the help of SoloSettle.
Well, we’ll let you decide on this one. Many consumers prefer SoloSettle over traditional debt settlement companies for a few reasons:
Below is a list of other great debt settlement companies to consider:
Debt consolidation is an excellent option if you want to maintain a good credit score while paying off your debts over a shorter period.
There are two types of debt consolidation: a traditional debt consolidation loan and a balance transfer credit card. Interested individuals need a decent credit score—at least 650—to qualify for either option.
A traditional debt consolidation loan involves borrowing enough money to cover your outstanding debt, like credit cards and medical bills. You’ll use the new loan to pay off your old debt and then make monthly payments toward the debt consolidation loan balance.
Debt consolidation loans typically have lower interest rates than credit cards, which means that you can pay down your balance more quickly by making just one monthly payment.
Your other option is a balance transfer credit card. You’ll transfer your high-interest debts to the new card, then make payments to the new lender until you pay it off. Many balance transfer credit cards offer 0% interest for a short period, like six months to a year.
Both methods are good options for those with decent credit, but if you have a poor credit score, you’ll need to look at other alternatives.
As a rule of thumb, it’s best to keep all your communications with debt collectors in writing. That being said, you can use the following methods to send a settlement offer to a debt collector:
If you’re feeling overwhelmed with debt as a California resident, there are organizations in place to help you find relief.
You may consider debt settlement, debt consolidation, or bankruptcy as some other debt relief options.
To learn more, check out our article called How to Get Debt Relief in California.
Yes, as long as you follow a few key steps.
Make sure to get your settlement agreement in writing. If your creditor attempts to contact you further concerning the debt, you can refer to the agreement.
You must abide by the terms of the agreement, or it will lose its validity. Make sure to pay your creditor in accordance with the settlement terms. The creditor may restart the lawsuit process if you don’t make your payment on time.
With some luck, determination, and SoloSettle’s software, you’ll be able to settle your debt and move on.
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.
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.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.
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