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How to Settle a Debt in Hawaii

Sarah Edwards | July 05, 2023

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Harris is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

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: If you’re facing a debt lawsuit in Hawaii, you might wonder if you can settle it before your court date. The answer is yes. First, respond to the lawsuit with an Answer. Second, make a settlement offer to kickstart negotiations. Third, get the settlement agreement in writing. SoloSettle can help you with all these steps and more.

Debt. Almost everyone has it, whether it comes from an auto loan, credit card, or mortgage. Unfortunately, sometimes people fall behind on their obligations and get stuck in a cycle of nonpayment. Once you stop paying your creditors, you can expect them to take action, potentially in the form of a debt lawsuit.

If your creditor wins a debt lawsuit against you, they’ll obtain a judgment they can use to garnish your wages or freeze your bank account. You won’t have complete control of your finances anymore. Instead, your creditor will take the maximum amount they can from you each pay period.

You don’t have to accept a judgment from your creditor or debt collectors. If you settle your debt before your court date, you can move on from the lawsuit and start fresh.

In this article, we’ll explain everything you should know about how to settle a debt in Hawaii.

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There are 3 steps to debt settlement

Getting sued in Hawaii is the worst. If you’d like to settle your debt before your court date, you should take these three specific steps:

  1. Respond to the debt lawsuit with an Answer.
  2. Make an offer to start the negotiation process.
  3. Get your settlement agreement in writing.

Keep reading to learn more about each step. Otherwise, check out this video:

1. Respond to the debt lawsuit with an Answer

Creditors and debt collectors will begin a debt lawsuit against you by filing a Complaint. The Complaint will list the grievances against you, including nonpayment of your obligation. It will likely document when you stopped making payments and the total amount you owe, including interest and fees.

Many people make the mistake of failing to respond to the Complaint. When you don’t respond to the lawsuit, you’re essentially admitting your guilt. Instead, file an Answer into the court case and send a copy to your creditor or debt collector.

An Answer is a legal document that allows you to respond to each claim against you and establish your defense in the case. You can use various defenses, but a few of the most common include insufficient documentation of the debt or lack of business relationship between you and the debt collector.

While you plan to settle your case before your court date, you should still file an Answer as an extra layer of protection between you and a judgment if your efforts to resolve the debt fall through.

In Hawaii, you have 20 days to respond to a debt lawsuit before you lose by default judgment. With a default judgment, creditors and collectors can garnish your wages and seize your property.

You can avoid a default judgment and buy yourself time to settle the debt when you file an Answer.

2. Make an offer to start the negotiation process

Your next step is to evaluate how much you can afford to pay in a settlement. Examine how much you have in savings and upcoming paychecks. If you’re short on cash, consider selling a few items you don’t need or obtaining help from friends and family.

We recommend that you start the settlement process by offering your creditor at least 60% of the total value of your debt. That amount is enough to show your creditor you’re serious about settling.

It’s not unusual to go through several rounds of negotiation before reaching a settlement agreement. Your creditor will likely try to counter your offer with a higher one. Keep a cool head throughout the process, and don’t accept any offer you know you can’t adhere to.

SoloSettle sends and receives settlement offers for you.

Get your settlement agreement in writing

Once you have a deal with your creditor, don’t transfer any money until you receive a signed, written agreement. A written contract ensures that everyone completely understands the terms of the deal.

Your agreement should list your repayment amount, the due date, and the method of transferring the money. It should also stipulate that the payment constitutes a total settlement of the debt. Creditors and debt collectors won’t have any rights to the remaining amount of your obligation upon settling.

Not sure what a settlement agreement should include? Here’s a debt settlement agreement example for your reference, with a preview attached below:


You’ll notice that there is a space for a notary to sign the contract. Notarizing the agreement ensures that all parties understand its terms and fully validate the deal.

Now, let’s look at an example of how to settle a debt in Hawaii.

Example: Diana gets sued by Empire Credit and Collections for a debt of $2,000. She uses SoloSuit to respond to the lawsuit with an Answer, giving herself time to work out a debt settlement. After taking a closer look at her finances, Diana decides she can afford to pay off up to 70% of the debt as a settlement. She uses SoloSettle to send an initial offer of 50%, or $1,000. After a few rounds of negotiations and counteroffers, Empire Credit and Collections agrees to settle for 60% of the debt, or $1,200. The collection agency notarizes the agreement, and SoloSettle sends Diana’s money according to the terms of the contract, keeping her financial information secure and private. Once Empire Credit and Collections receives the payment, they file the paperwork to dismiss her case and report the debt as settled to the credit reporting agencies.

What are Hawaii’s debt collection and debt settlement laws?

Hawaii has several laws that prohibit debt collectors from taking specific actions. According to HI Rev Stat § 443B-16 (2013), creditors cannot:

  • Use profane or obscene language against the creditor.
  • Make calls to the creditor without disclosing their identity.
  • Purposely cause expense to the creditor by calling them long-distance or using telegrams.

Under HI Rev Stat § 443B-17 (2011 through Reg Sess), collection agencies cannot:

  • Publish the consumer’s debt through means such as the newspaper.
  • Notify people the consumer knows that the person owes a debt, such as an employer or family member.

The HI Rev Stat § 443B-18 (2020) makes it illegal to use fraudulent or deceptive means to collect a debt.

In addition to the debt collection statutes in Hawaii, the state also abides by the Fair Debt Collection Practices Act (FDCPA), which has additional protections for consumers, such as prohibiting debt collectors from:

  • Calling the consumer at odd hours, like before 8 a.m. or after 9 p.m.
  • Contacting a consumer more than seven times in one week concerning a debt.
  • Threatening the consumer with jail time if they don’t repay a debt.

Like other states, Hawaii has statute of limitations laws that cap the time a creditor has to pursue debt collection. Under HI Rev Stat § 657-1 (2012), oral and written contracts and debts on account are limited to six years.

Plus, 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 Tennessee, 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 are the best debt settlement companies?

If you’re considering seeking help for debt settlement, there are a few companies that we recommend.


SoloSettle is a debt settlement organization that can help you if you’re facing a debt lawsuit. Our team works directly with your creditor to negotiate a settlement for you. Once you agree to the settlement, we’ll facilitate the payment process, so you won’t need to share your bank account details with the creditor.

Freedom Debt Relief

Freedom Debt Relief is one of the older debt settlement organizations in the United States. Since 2002, the company has helped more than 750,000 people settle their unsecured debts. Freedom Debt Relief’s programs last between two and four years and have fees of between 15% and 25%.

National Debt Relief

National Debt Relief is another large provider of debt settlement services. Since 2009, its programs have allowed thousands of individuals to settle their debts and obtain a fresh financial slate. Most people who enroll with National Debt Relief will complete their programs within four years.

What are the best ways to contact a debt collector?

If you’d like to try settling your debt yourself, you can start the conversation via phone call, email, or letter.

We recommend email since it’s efficient and provides you with a written record of your discussion with your debt collector. You’ll have time to consider each message from your creditor rather than being put on the spot.

If you prefer an oral negotiation, you can call your debt collector. However, we recommend recording the conversation so you can refer to it if necessary. Under HI Rev Stat § 803-42, only one party needs to consent to record a call in Hawaii. You’ll be the consenting party.

FAQs about how to settle a debt in Hawaii

Do you have more questions about settling a debt in Hawaii? Here are a few of the top inquiries we hear at SoloSuit.

Q. What is a reasonable offer to settle a debt?

People often wonder what amount they should offer their creditors in a settlement. We recommend starting with at least 60% of your debt’s value. That’s enough to express sincerity about settling your debt, and your creditor will counter the offer if they don’t believe it’s enough.

Q. Can I do my own debt settlement?

Yes, it is possible to do your own debt settlement. Before doing so, spend some time reviewing the guides on our SoloSuit website. Once you feel ready, email your creditor to start the process.

Q. Is it better to settle a debt or pay it off?

It’s always better to pay a debt in full. Doing so will maintain your credit score and your relationship with your creditor. However, settling a debt is appropriate when you’re facing a lawsuit or a debt trap you can’t get out of.

How to get debt relief in Hawaii

Remember those debt relief guides we spoke about earlier? We’ve combined a handy list of them you can review as you prepare to settle your debts.

Debt settlement is a process that delivers results

Financial matters are a part of life, but sometimes they get out of hand. If you’re in a difficult situation, debt settlement may be your ticket out. Make sure you understand the process before starting and only accept a settlement offer you can afford to repay.

SoloSuit can help with your debt settlement process — find out how.

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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.

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