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How to Settle a Debt in Montana

Sarah Edwards | January 12, 2023

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards 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.

Settle your debt in Montana.

Summary: If your creditor is suing you for unpaid debt in Montana, you’re likely wondering how to handle it. The good news is that debt settlement may be an option. To settle a debt lawsuit in Montana, you should respond to the case, send a settlement offer, and get the settlement agreement in writing. SoloSettle can help with all these steps and more.

You're not alone if you’ve got debt from credit cards, personal loans, and a mortgage in Montana.

You may have also fallen behind on these payments despite your best efforts. When creditors stop receiving payment on an outstanding obligation, they may charge off the account and send it to collections or file a debt lawsuit against the consumer.

If you’ve received notice of a debt lawsuit against you, it may seem like the end of the world. No one wants to go to court or be stuck with a judgment against them.

Fortunately, settling the lawsuit before your court date is possible, which can avoid a judgment and stop future collection activities against you. Let’s walk through how the debt settlement process works in Montana.

Follow these 3 steps to settle a debt in Montana

Getting sued for debt sucks. But you can reach out to the creditor or debt collector suing at any stage of the lawsuit process to discuss debt settlement. Just follow these three steps:

  1. Reply to the debt lawsuit with an Answer.
  2. Figure out how much you can offer to settle.
  3. Get the debt settlement agreement in writing.

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

1. Reply to the debt lawsuit with an Answer

Your creditor or debt collector will begin the legal process against you by filing a Complaint (also known as a Petition in some states). A Complaint lists their reasons for the debt lawsuit. Usually, your creditor will say that you haven’t stayed on top of your payments for a specific time. They’ll list the balance of your loan plus any accumulated interest and fees.

Most people make their first mistake by failing to respond to the Complaint. Even if you intend to settle the debt before your court date, you’ll want to send a legal response, known as an Answer, to your creditor and the court.

In Montana, you have 21 days to respond to a debt lawsuit before the court can order a default judgment against you, meaning you lose automatically. With a default judgment, creditors and debt collectors can garnish your wages and seize your property.

You’ll want to do everything you can to avoid a default judgment. This includes responding to the case.

In your Answer, you’ll respond to each claim against you and state your defenses to the case. There are numerous defenses you can use. A couple of the most common include improper validation of the debt, lack of proper jurisdiction over the claim, or an expired statute of limitations.

For tips and tricks on preparing your Answer, check out the following video:

Respond with SoloSuit

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2. Figure out how much you can offer in a settlement

Your next step is determining how much you can afford to pay in a debt settlement. Take a look at your savings account and assess how much money you’ll have from upcoming paychecks.

Most debts can be settled at 50% of the original amount, but that doesn’t make it easy to do so. Ideally, you’ll start with an offer of around 60% of your debt’s value. That amount is enough for the creditor to see that you’re serious about resolving the matter before going to court.

If you can’t afford 60%, offer what you can. You should explain your financial circumstances so that your creditor understands where you’re coming from.

Be prepared for your creditor to counter your offer with one of your own. It’s not unusual to go through several rounds of negotiation before arriving at an agreement.

Before accepting an agreement, ensure that you can abide by its terms. If you agree to a contract you can’t actually afford, the creditor or collector will continue their lawsuit against you, and they’ll use proof of the failed settlement to further their claims.

SoloSettle sends and receives settlement offers for you.

3. Get your settlement agreement in writing

Before sending your creditor any money, make sure to get the terms of your settlement in writing. A written agreement ensures that you and your creditor or collector are on the same page.

This is an essential step because some debt collectors are known to settle a debt verbally, then continue with legal action even after making an agreement. Having everything in writing prevents them from going back on their word.

Your agreement should indicate how much you will pay, when the payment is due, and where you’ll send the money. It should also state that the settlement waives any further rights of the creditor or collector to the remaining balance.

Once you fulfill your side of the bargain, they’ll need to report the account settled to the credit reporting bureaus and halt all further collection activities.

Generally, the creditor or debt collector will draft the debt settlement agreement document for you. Be sure to review it carefully before signing..

Here’s a debt settlement agreement example, with a snippet attached below, so you know what to for.

Debt Settlement Agreement Example

You’ll note the space for a notary to sign as a witness for both parties. Notarizing the agreement adds an extra layer of legal protection to the contract.

Now, let’s go over a hypothetical example of how to settle a debt in Montana.

Example: Jeff is being sued by Credit Associates in Montana for an overdue credit card debt of $3,000.Jeff responds to the lawsuit with an Answer, claiming insufficient validation of the debt. This gives Jeff time to look over his finances and make a plan to settle the debt. Jeff uses SoloSettle to send a settlement offer of 60% of the debt’s value in a settlement, or $1,800.Credit Associates counters with an offer of $2,000. Jeff checks his finances and decides he can afford the settlement. Once they sign a settlement agreement, SoloSettle transfers Jeff’s payment to the collectors, keeping his financial information private and protected. Credit Associates drops the lawsuit against Jeff and reports the account as settled to the credit reporting bureaus.

Montana debt collection and settlement laws can protect you

Montana abides by the Fair Debt Collection Practices Act (FDCPA). The FDCPA outlines activities that debt collectors cannot take against a consumer, including the following:

  • Calling a debtor at odd hours, like before 8 a.m. or after 9 p.m.
  • Pretending to be someone they’re not, such as a law enforcement official
  • Using abusive, threatening, or obscene language against a consumer
  • Telling the consumer they’ll go to jail if they don’t pay the debt
  • Contacting people the consumer knows and telling them they owe a debt
  • Calling the debtor at work, if the debtor asks them not to

If your creditor or debt collector makes you feel harassed in any way, you should consider filing a complaint with the FTC. They’ll investigate your claim and determine whether they need to take action against the creditor.

In Montana, there is a statute of limitations law that limits the time a creditor or debt collector has to file a debt lawsuit. Under MT Code § 27-2-202 (2020), creditors can pursue the repayment of written agreements for eight years and an oral contract for five years.

According to MT Code § 27-2-201 (2013), there is a 10-year statute of limitations for collecting on judgments from debt collection lawsuits.

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 Montana, 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.

Settle your debt with SoloSettle

SoloSettle helps people resolve individual debts, particularly when facing a lawsuit.

SoloSettle, powered by SoloSuit, uses a tech-based approach to help consumers settle their debts in response to being sued. negotiates a settlement directly with your creditors, allowing you to sit back while we obtain an agreement that works for you. We’ll also facilitate the payment process, so you won’t need to give your account details to the creditor.

Here are a few reasons consumers prefer SoloSettle over traditional debt settlement companies:

  • Most debt settlement companies require you to have a debt over $15,000. SoloSettle can help you settle a debt of any size.
  • SoloSettle takes an active approach to debt settlement, whereas many settlement agencies take a more passive role, waiting for settlement offers to come to them.
  • SoloSettle has legal defense built in with SoloSuit. While settling, you can use SoloSuit to block lawsuits if you need. Most debt settlement companies don’t help with legal defense; if you’re sued for a debt, you are on your own.
  • SoloSettle is offered by SoloSuit, a trusted brand and a legitimate company. Many traditional debt settlement companies are actual scams.

Still not convinced? Check out this review from a real SoloSettle customer:

End your debt with SoloSettle.

"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: I didn't have to deal with the plaintiff's lawyer, and 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." - Dan

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What are the top debt settlement companies?

There are many debt settlement companies that can help you resolve your accounts. Beware that there are many debt settlement agency scams out there, so you should do your research before selecting one to work with. Here are a few of our recommendations:

National Debt Relief

National Debt Relief is one of the most popular debt settlement companies. It’s helped thousands of people obtain a fresh financial start through debt settlement relief. Most people save more than 50% of the total value of their debt. The company charges fees between 15 to 25% for their services.

Freedom Debt Relief

Freedom Debt Relief is another large debt settlement company in the U.S. You’ll need at least $7,500 in unsecured debt to qualify for their programs. Unsecured debt includes credit cards, personal loans, and medical debt. Fees range between 15 to 25% of the total value of your debt, and programs last up to four years.

Century Support Services

Century Support Services is another debt relief company that’s popular with customers. Since 2012, the organization has helped customers resolve more than $1.7 billion in debt. Century Support Services charges clients 18% to 25%, depending on how much debt they seek to settle.

What is the best way to start debt settlement with my creditor?

If you’re ready to start your debt settlement journey, you can begin by calling, emailing, or sending a letter to the creditor or debt collector.

We recommend email since it’s fast and lets you keep a written conversation record.

If you prefer speaking over the phone, you can call them. However, be aware that sometimes sneaky debt collectors will use strategic methods to get you to admit to owing a debt. That may not be advantageous if you’re facing a lawsuit. If you decide to call your debt collector, we recommend recording the conversation.

Under MT Code § 45-8-213, all parties must agree to a recording of a phone conversation. Before recording the call, you’ll have to get the other party’s explicit consent.

Montana debt settlement FAQs

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

Q. When is a debt uncollectible in Montana?

Your creditor can pursue a debt lawsuit against you if the statute of limitations hasn’t run out. If the debt passes the statute of limitations, it doesn’t magically disappear. Your creditor can still call you and send you letters. Repaying or settling the debt will stop further collections activity.

Q. What percentage of debt is best to offer in a settlement?

You should offer what you can afford to pay in a debt settlement. The higher your offer, the more likely the creditor is to agree to it. We recommend starting negotiations at 60% of your debt’s total value.

Q. Can I take care of my own debt settlement?

Yes, you can handle your own debt settlement. Just make sure you learn about how the process works before beginning your negotiations. Don’t make any payments to the creditor until you have a signed settlement contract to protect you.

How to get debt relief in Montana

If you’re looking for help resolving your debts in Montana, the state has government agencies in place to assist consumers like you. SoloSuit has other guides you can refer to for your research. Here are a few:

Debt settlement is worth it if you’re facing a lawsuit

Rather than allowing your creditor to obtain a judgment against you in a debt lawsuit, consider debt settlement. Resolving your debts in a settlement prevents your creditors from pursuing future collection activities against you and allows you to clear up the matter and improve your financial well-being.

If you’re not ready to handle debt settlement on your own, let SoloSuit help you.

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.)

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