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How to Settle a Debt in Connecticut

Sarah Edwards | March 09, 2023

When you reach a debt settlement agreement in Connecticut ^^

Summary: If you’re facing a debt lawsuit in Connecticut, you’ll want to settle the claim and avoid a court judgment. In order to settle your debt in Connecticut, you should respond to the lawsuit within the 30-day deadline, send a settlement offer to open up negotiations, and get the settlement agreement in writing. SoloSettle can help you with all these steps and more.

Debt is a part of life that can be difficult to overcome. Whether you have credit cards, student loans, or medical bills, there may be times when you can’t keep up with your payments.

When you stop paying a creditor, they will start calling you and sending you letters, encouraging you to get back on track with your payments. They may charge off your account and sell it to a debt collector if you don't. Sometimes, they’ll take legal action against you.

If your creditor decides to sue you for an unpaid bill, you’ll want to resolve the matter quickly. If you don’t, and the claim goes to court, the judge may award your creditor a judgment against you.

A judgment will allow your creditor to take further action, like garnishing your wages. In some cases, they may be able to freeze your bank account or seize your property.

In order to avoid a judgment, you can settle the debt before your court date. Keep reading to learn more about how to settle a debt in Connecticut, including state-specific laws and procedures.

There are 3 primary steps to settling a debt

If you’re being sued for debt in Connecticut, you can still settle the debt when you follow these three steps:

  1. Respond to the debt lawsuit with an Answer.
  2. Make a settlement offer to open up negotiations.
  3. Get the settlement agreement in writing.

Below, we will explore each of these steps in detail. Don’t like reading? Check out this video instead:

1. Respond to the debt lawsuit with an Answer

Your creditor will begin by filing a Complaint with your local court. A Complaint lists the reasons for the lawsuit, such as your nonpayment of a debt. It will document the total amount you owe, including interest and penalties.

You’ll want to respond to the creditor’s Complaint with an Answer. An Answer is a formal, legal response you use to defend yourself against your creditor’s claims. Even though you hope to avoid going to court by settling the lawsuit, an Answer lets your creditor know they won’t be able to steamroll over you.

There are various defenses you might use. Two of the most common are insufficient debt validation and lack of relationship with the creditor or collection agency. If neither of those defenses fit, another one might align better with your case.

If you want help preparing your Answer, watch our video on the process below:

6 Tips for Drafting the Answer in a Debt Collection Lawsuit - YouTube

2. Make a settlement offer to open up negotiations

Next, you’ll want to determine how much you can afford to offer your creditor in a debt settlement. We recommend offering at least 60% of your debt’s value. That amount is enough for your creditor to evaluate whether accepting a lump-sum payment is better than the resources they will spend for further collection activities.

If you don’t have enough cash to offer 60% in a settlement, consider selling a few things you don’t need or taking on an odd job. You could also ask family and friends for help.

You might go through a few negotiation rounds with your creditor before reaching an agreement. Explain your financial situation if your creditor isn’t willing to budge from their demands. Some creditors will come up with alternative arrangements if they know you’re having a difficult financial time.

SoloSettle takes care of the negotiation process for you.

3. Get the settlement agreement in writing

Once you agree with your debt collector, get it in writing. That way, you and your creditor fully understand the terms of the deal, and there’s no disconnect.

Your written agreement should indicate how much you will pay, when you’ll make the payment, and where you’ll send it. It should also include language that stipulates your creditor gives up collection rights to the remaining obligation. They’ll write off the debt and drop the lawsuit against you once you make the payment.

We recommend that you include a place for a notary to sign as a witness for both parties. Notarization will help protect you if your creditor tries to back out of the deal.

You can prepare your agreement ahead of the negotiation process. That way, you’ll only need to insert the applicable terms before sending the contract for your creditor to sign.

Explore this debt settlement agreement example to get an idea of what to look for in yours.

Now that you understand the debt settlement process, let’s walk through an example of how to settle a debt in Connecticut.

Example: Bob is behind on his bills. He’s stopped paying off his Discover card, and after several months, Discover decides to pursue a lawsuit against Bob. When Bob receives the Summons and Complaint in the mail, he uses SoloSuit to respond with an Answer before the 30-day Connecticut deadline. This gives Bob time to make a settlement plan. Next, he uses SoloSettle to send a settlement offer to Discover. Since he owes $1,000, Bob sends an initial offer of $500. Discover considers Bob’s offer and decides to counter with $700. After a few rounds of negotiations, they reach a settlement at $600. After preparing and signing a settlement agreement, SoloSettle transfers Bob’s money to Discover, keeping his financial information private and secure. Discover drops the case against Bob, and he is finally off the hook.

What are the debt collection and debt settlement laws in Connecticut?

Connecticut adheres to the federal guidelines concerning debt collection, known as the Fair Debt Collection Practices Act (FDCPA). This act forbids debt collectors from taking the following actions:

  • Calling consumers before 8 a.m. or after 9 p.m.
  • Contacting the consumer at work when they ask the creditor not to.
  • Publishing the consumer’s debt in any manner, including in the newspaper or social media.
  • Pretending to be someone they’re not when contacting a debtor.
  • Using legal templates designed to look like process documents when mailing a consumer.

In addition to the FDCPA, Connecticut has a statute of limitations that caps the time a collector has to sue the consumer for a debt.

Under CT Gen Stat § 52-576 (2018), collectors can pursue a consumer for a written contract debt for up to six years. Oral contracts have a statute of limitations of three years under CT Gen Stat § 52-581 (2014).

Finally, the Federal Trade Commission has recently amended the Telemarketing Sales Rule to expand debt settlement regulations to all debt relief organizations and companies. All 50 states, including Connecticut, are governed by this Rule as it relates to debt settlement practice.

Under the new Rule, any company that provides debt relief services, namely debt settlement companies, cannot:

  • Charge upfront fees. Debt settlement companies cannot collect any fees from a consumer before the debt has been effectively settled or otherwise resolved.
  • Fail to disclose certain information about its services before a consumer enrolls in the program. This includes how much the service costs, how long it takes to see results, how much money must be saved before a settlement offer is made, consequences that may occur if the consumer fails to make payments on time, customer’s rights, and other important terms.
  • Misrepresent their services. No false or unsubstantiated claims can be made regarding a debt settlement company’s services.

What’s the best debt settlement company?

Finding the best Connecticut debt settlement company is about identifying which company best meets your particular needs for debt settlement. SoloSettle differs from many traditional debt settlement companies. Below, let’s explore what makes SoloSettle unique.

  • SoloSettle is a product of SoloSuit, a trusted brand with years of experience helping consumers manage debt. Sophisticated scams that prey on those overwhelmed with debt problems are a real concern. With SoloSuit’s SoloSettle tool, you know you are working with a valid company that has helped thousands of consumers.
  • SoloSettle works with debts of any size. Other debt settlement companies require a substantial minimum debt before taking you on as a client.
  • The SoloSettle tool is an active attempt to settle a debt, making it ideal to use if a lawsuit has been filed. The settlement tool is equally helpful to avoid a debt proceeding to a lawsuit.

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Other reputable debt settlement companies include:

  • New Era Debt Solutions—New Era has been in business for over 23 years, making them a trusted name in debt settlement. They have an A+ rating from the Better Business Bureau (BBB).
  • Century Support Services—Century has over a decade of experience in helping consumers settle debts and maintains an A+ rating from the BBB. The business has consistently high customer satisfaction scores, but the fees can be steep. Make sure you understand the fee structure before making a final decision.
  • National Debt Relief—another company with an excellent BBB rating and consistently ranks well for consumer satisfaction. You need at least $7,500 in outstanding debt.

What’s the best way to contact my creditor?

If you’re ready to start your debt settlement journey, you can contact your creditor via email, letter, or phone.

We recommend emailing your creditor since it allows you to keep a written record. It’s quick, but you’ll be able to consider your responses before replying to the creditor rather than being put on the spot.

Some people prefer communicating directly with their creditors. A phone call can allow you to settle quickly, usually within an hour. However, if you call the creditor, you should record the conversation.

Under CT Gen Stat § 53a-187, both parties must consent to a recording. You’ll need to ask your creditor for permission before beginning the recording.

FAQs about how to settle debts in Connecticut

Most people have many questions about debt settlement, especially if they’ve never tried it before. Here are a few of the most common inquiries we hear in Connecticut:

Q. What percentage of debt should I offer to settle?

You’ll want to offer at least 60% of the total value of your debt in a settlement. That’s enough money for your creditor to take your offer seriously. However, offer what you can if you can’t afford that much. Sometimes, debt collectors will provide other arrangements if they understand your financial situation.

Q. How long will it be before a debt becomes uncollectible in Connecticut?

Written debts have a statute of limitations of six years in Connecticut, while the statute of limitations is three years for oral debts. Once a debt passes the statute of limitations, creditors can no longer take legal action against you. However, they can still report your account to credit agencies. They can also call you and send you collection letters.

Q. Can I do my own debt settlement?

Yes, it is possible to do your own debt settlement. Study up on the process to learn how it works. After you contact your creditor and arrange a deal, make sure to get it in writing before transferring your payment.

How to get debt relief in Connecticut

SoloSuit has several other guides concerning debt settlement and collections in Connecticut. Here are a few:

How to Get Debt Relief in Connecticut | SoloSuit Blog

Statute of Limitations on Debt in Connecticut | SoloSuit Blog

How to Answer a Summons for Debt Collection in Connecticut (2020 Guide) | SoloSuit Blog

Connecticut Case Lookup — Find Your Court Case | SoloSuit Blog

Debt settlement can help you get out of a challenging financial situation

If you’re facing a debt lawsuit, debt settlement can help you resolve the situation while avoiding a judgment. Before you start the negotiation process, determine what you can afford to pay. Make sure to file an Answer to the debt lawsuit and get your settlement agreement in writing.

Ready for professional debt settlement help? Turn to SoloSuit.

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