How to Settle a Debt in Kentucky

Dena Standley | January 09, 2023

Edited by Hannah Locklear

Debt settlement can be the solution to get out of debt when keeping up with monthly payments becomes challenging. It is a method that has helped millions of consumers get out of debt to avoid plunging deeper into debt or filing for bankruptcy.

Debt settlement entails paying a creditor or debt collectors a significant percentage of what you originally owed—after making a settlement offer directly or through a debt settlement company. Once you make the payments, the debt is marked as paid and any pending lawsuits are withdrawn.

In this article, we will guide you through how to settle a debt in Kentucky, including state-specific timelines and laws.

Let’s jump right in.

Take these three steps to settle a debt in Kentucky

Debt collection agencies and creditors in Kentucky often welcome debt settlement deals for delinquent accounts. They may also agree to settle if you prove that paying the whole amount is nearly impossible due to your financial circumstances. If you’ve been sued for a debt in Kentucky, follow these steps to settle the debt before going to court:

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

Below, we’ll break down each of these steps in detail. You can also check out this video to learn more:

1. Respond to the debt lawsuit with an Answer

An Answer is a legal document defendants must send when they have been sued. Even in debt collection cases, the accused must respond to the allegations made in the Complaint document. Kentucky laws allow you to answer in three ways: admit, deny, or deny due to lack of knowledge.

Next, you must list your affirmative defenses. These are the reasons that can help your case if the creditor rejects your offer to settle. These defenses can also weaken the creditor's case, and they may prefer settling than risk losing in court. Attend to other requirements in the lawsuit and ensure you enter all the crucial information.

According to Kentucky Rules of Civil Procedure 12.01, you have 20 days to respond to a debt lawsuit with an Answer. Failure to comply may lead to a default judgment entered against you.

With a default judgment, the creditor or debt collector can garnish your wages and seize your property. This is why you should always respond to a debt lawsuit, even if you intend to settle the debt before going to court.

SoloSuit can help you draft and file an Answer to your Kentucky lawsuit in minutes.

2. Make a debt settlement offer to start negotiations

Once you successfully send the Answer, decide which approach is ideal for negotiating a settlement. For instance, do you want to do it yourself or hire a debt settlement company? As you ponder on which option to choose, you also must consider these two factors:

• Calculate how much you can pay off: Debt settlement requires you to have a certain amount already saved to make a lump sum payment. If you still need to save money, cut back on your expenses to accumulate enough money for settlement. Afterward, you can add it to what you already have.


• Determine the percentage the creditor is likely willing to accept: Most creditors accept between 60–80% of the original amount. If you’re dealing with a debt collection agency, they might accept an even lower amount.

Once you know how much you can afford to pay, and how much the creditor might accept, send your first settlement offer. This will most likely kick start the negotiation process. You might have to go through a few rounds of offers and counteroffers before reaching an agreement.

SoloSettle takes care of the debt settlement negotiation process for you.

3. Get the settlement agreement in writing

Do not let a debt collector convince you to make the settlement payment without a written agreement, even if they promise to keep their word. Consumers have been deceived and forced to top up the balance so that the creditor can write their debt as paid on their credit report or withdraw a case from court. Hence, ensure the agreement you sign has all the crucial information. Here is a debt settlement agreement example to use as a guide.

SoloSettle manages the debt settlement agreement document on your behalf.

SoloSettle is the easiest way to settle your debt

SoloSettle empowers consumers by helping them negotiate a debt settlement on their own terms. The web app allows you to send and receive offers from the creditor. It also enables you to draft the Debt Settlement Letter, and the debt specialists involved in the process protect you from the lies and trickery debt collectors use.

In addition, SoloSettle includes the proper legal language to protect your rights as you communicate with the creditor. After you get a settlement deal, SoloSettle takes care of the settlement agreement documents and protects your financial information, preventing the creditor from overcharging you.

Now, let's take a look at an example of debt settlement in Kentucky.

Kentucky debt settlement laws can protect you

Kentucky protects its citizens from bad business practices using the Fair Debt Collection Practices Act and additional Kentucky debt adjusting laws (KY Rev Stat § 380.100 (2022). These guidelines state that debt settlement companies should:

• Fully disclose the services to be provided and the fees involved
• Ensure the agreement is done in writing and contains all the vital details
• Not charge exorbitant fees and reveal the method of coming up with the fees
• Allow the debtor to cancel the agreement with a good reason

If a debt settlement company violates these guidelines, report them to the Kentucky attorney general's office. You can also write a complaint on the Fair Trade Commission website.

Additionally, 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 Kentucky, 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?

Not all debt settlement companies are legitimate. Some take advantage of desperate consumers and give false promises or ask for money before getting a settlement deal. Before picking a debt settlement company to work with, read their reviews on various platforms and confirm they are not among those banned by FTC. The following are debt settlement companies to consider:

• SoloSettle: Powered by SoloSuit, SoloSettle allows you to transact a debt of any amount, and the fee is fairer than most debt settlement companies. SoloSuit also has an excellent reputation, and you can be sure it is not a scam. You don’t to pay any fees until an agreement is reached.


• United Settlement: The experts help you determine the best approach before contacting the creditor for a settlement offer.


• New Era Debt Solution: This company gives you a free debt analysis before you begin the debt settlement process.


• Century: As with most debt settlement companies, Century takes the burden of negotiation off your hands, and they come to you when they get a good deal.

Choose the best method to contact the debt collector

Contacting a debt collector is often stressful because they are not pleasant to talk to if you are not promising to make payments. The conversation may be better than you thought once they realize you want to clear your debt. Choose one of these methods to talk to them about debt settlement:

• Phone: Debt collectors prefer this method of communication because there is no record of what was said or promised. Fortunately, Kentucky is a one-party consent state, meaning you can legally record the conversation according to KY Rev Stat §.010.


• Mail: Discussing a settlement deal via mail takes longer. However, you get ample time to think through your response. You also have a written record of the settlement process. Use certified mail if you prefer this method because it allows you to confirm receivership.


• Email: This method is instantaneous and simplifies the settlement process. You can get through the negotiation process quickly if you have the correct email address. Additionally, you have the entire negotiation on record.

The contact information for the creditor or the lawyer handling the case will be in the lawsuit letter. If not, call the company and ask for the person in charge of debt settlement requests. Notably, debt settlement companies often know who to contact if they have worked with the creditor before.

How to get debt relief in Kentucky

Apart from debt settlement, other methods are available to help you get out of debt. They include debt consolidation and bankruptcy. Debt consolidation generally involves taking a loan with better rates to pay off several debts and remaining with one debt to pay off.

Bankruptcy is often the last resort for people whose liabilities exceed their assets and who have no other means to pay their debts. Read the following debt relief guide (how to get debt relief in Kentucky) for a more comprehensive discussion of these methods and get a list of debt relief organizations that can help.

SoloSuit can help you settle your debt

SoloSuit is committed to helping consumers lead a debt-free life by offering various documents to assist in communicating with debt collectors. To help you with debt settlement, our team of experts created SoloSettle, a web app that customizes your debt settlement offers and negotiates on your behalf.

Once an agreement is reached, SoloSettle manages the documentation of it for you and submits your payment so you can keep your financial information safe and private from debt collectors.

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.”

FAQs on debt settlement in Kentucky

Can Kentucky debt settlement companies negotiate medical bills?

Yes, most debt settlement companies negotiate medical bills and enable you to pay a lowered percentage of what you originally owed. Legitimate settlement companies have a good working relationship with most creditors and debt collection agencies. They may get a reasonable settlement deal, and you pay 40–60% of the original amount.

Are private student loans included in debt settlement programs?

Yes, private student loans are included in debt settlement programs, and you may pay less than you owe. However, you must prove to the creditor or collection agency that you cannot make monthly payments for them to accept a settlement deal.

How can I settle my credit card debt in Kentucky?

First, establish if you can gather a lump sum amount to settle the debt. You can save part of your monthly income until you save an amount a creditor can accept (60–80%). Next, send a Debt Settlement Letter or hire SoloSuit, to negotiate on your behalf. They may get a better deal than you would.

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

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.

• Alabama
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Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.

• Absolute Resolutions Investments LLC
• Accredited Collection Services
• Alliance One
• Amcol Clmbia
• American Recovery Service
• Asset Acceptance LLC
• Asset Recovery Solutions
• Associated Credit Services
• Autovest LLC
• Cach LLC
• Cavalry SPV I LLC
• Cerastes LLC
• Colinfobur
• Covington Credit
• Crown Asset Management
• CTC Debt Collector
• Cypress Financial Recoveries
• Delanor Kemper & Associates
• Eagle Loan of Ohio
• Educap
• Estate Information Services
• FIA Card Services
• Forster & Garbus
• Freshview Solutions
• Fulton Friedman & Gullace LLP
• Harvest Credit Management
• Howard Lee Schiff
• Hudson & Keyse LLC
• Integras Capital Recovery LLC
• Javitch Block
• Jefferson Capital Systems LLC
• LVNV Funding
• Mannbracken
• Mariner Finance
• Medicredit
• Michael J Adams PC
• Michael J Scott
• Midland Funding LLC
• Mullooly, Jeffrey, Rooney & Flynn
• Mountain Land Collections
• MRS Associates
• National Collegiate Trust
• Nationstar Foreclosure
• Northstar Capital Acquisition
• NCEP LLC
• NRC Collection Agency
• OneMain Financial
• Palisades Collection LLC
• Pallida LLC
• Paragon Revenue Group
• Pinnacle Collections Agency
• PMAB LLC
• Portfolio Recovery Associates
• Provest Law
• PYOD LLC
• Reunion Student Loan Finance Corporation
• Revenue Group
• Regents and Associates
• RSIEH
• Salander Enterprises LLC
• Second Round Sub LLC
• Security Credit Services
• Sherman Financial Group
• Suttell and Hammer
• T-Mobile
• Transworld Systems
• Tulsa Teachers Credit Union
• UCB Collection
• Velo Law Office
• Velocity Investments
• Waypoint Resource Group
• Weinberg and Associates
• Wolpoff & Abramson

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

• Bank of America
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• Chase
• Credit One Bank
• PayPal Synchrony Card
• SYNCB/PPEXTR
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