How to Settle a Debt in North Dakota

Sarah Edwards | March 08, 2023

Edited by Hannah Locklear

You work hard to maintain your standard of living and repay the debts you owe. However, it’s easy to get too caught up in your debts — so caught up that you can’t afford to repay them. When that happens, creditors take action.

After a consumer stops paying an obligation, creditors will start calling and sending letters. If the debtor doesn’t get back on track with their payments, the creditor may sell the account to a debt collection agency or file a debt lawsuit against you.

If your creditor decides to pursue a debt lawsuit against you, a court may award them a judgment. A judgment will allow the creditor to take more intrusive actions against you, which might include garnishing your wages or freezing your bank account.

You don’t want a judgment, so it’s best to resolve your case before it goes to court. You can do so by repaying or settling the debt with your creditors.

There are 3 steps to debt settlement in North Dakota

If you’re seeking to settle your debt in North Dakota, there are three steps you’ll need to take:

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

Below, we 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 the lawsuit process by filing a Complaint against you. A Complaint lists the reasons for the lawsuit, which includes nonpayment of a debt. It also details how much you owe and any interest or fees.

You have 21 days to respond in North Dakota. If you don’t respond in time, you will lost by default judgment. This may give your creditor or debt collectors the right to garnish your wages and seize your property.

Many people don’t realize that they give up the right to defend themselves when they don’t file an Answer. An Answer is your legal response to the lawsuit. You’ll list your responses to each claim against you and explain your affirmative defenses in your Answer document.

Some typical defenses are improper validation of the debt or lack of the court’s jurisdiction over the lawsuit. However, if neither of those fit your case, you can consider other defenses.

You may wonder why you need to file an Answer if you plan to settle your case before your court date. Filing an Answer protects you in case your efforts at settlement fail. It also acts as a safeguard in case your creditor doesn’t report the settlement to the court.

Respond to your debt lawsuit online with SoloSuit.

2. Make an offer to start negotiations

Next, you’ll need to determine how much you can afford to offer your creditors in a settlement. Take a close look at your finances, and evaluate how much money you have available.

We recommend that you begin the negotiations with a minimum of 60% of the total value of your debt. That amount is large enough for your creditors to consider whether accepting a lump sum payment from you is better than going through the hassle and cost of a lawsuit.

If you can’t afford 60% in a debt settlement, offer what you can and explain your financial situation. Sometimes creditors will be more tolerant if they understand where you’re coming from.

You may go through several rounds of negotiations before reaching an agreement. Don’t make any deal you know you can’t afford. If you agree and fail to live up to the terms, your creditor will continue with the lawsuit, and you’ll likely end up with a judgment.

SoloSettle takes care of the negotiation process for you.

3. Get the agreement in writing

Your next step is to record the agreement in writing with your creditor. A written contract ensures there is no misunderstanding between you and your debt collector concerning the terms of the deal.

Your agreement should list the amount you’ll repay, when it’s due, and where you’ll send the money. It should also stipulate that your creditor waives the right to the remaining obligation and cannot pursue further collections against you.

Generally, creditors and debt collectors will draft the agreement document, so just be sure to review it carefully before signing.

We also recommend you include space for a notary to witness the agreement for you and your creditor. Notarizing the agreement adds further legal credibility to the deal.

SoloSettle manages your debt settlement agreement for you.

Here is a debt settlement agreement example to give you an idea of what yours should include.

Now, let’s review an example of how to settle a debt in North Dakota using these three steps.

What are North Dakota’s debt collection and debt settlement laws?

North Dakota recognizes the Fair Debt Collection Practices Act (FDCPA). Under the FDCPA, debt collectors cannot take specific actions, including:

• Misrepresenting who they are when contacting a debtor.
• Telling the consumer they’ll go to jail if they don’t pay a debt.
• Calling the debtor repeatedly on the same day concerning an obligation.
• Contacting the consumer before 8 a.m. or after 9 a.m.
• Using obscene or threatening language when calling a debt collector.
• Sending the debtor letters using a legal process template.

North Dakota has a statute of limitations on the collection of debt. Under ND §28-01-16, written and oral contracts have a statute of limitations of six years. Similarly, collections of debt on account are limited to six years.

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 North Dakota, 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?

Some organizations can assist you if you’d like help with the debt settlement process in North Dakota. Let’s explore a few in this section.

SoloSettle isn’t like most debt settlement companies. As a tech-based approach to debt settlement, SoloSettle assists consumers in negotiating a settlement in advance of a debt lawsuit. Our software sends settlement offers directly to your creditors or debt collectors until you make a fair deal.

Once you reach an agreement you approve of, SoloSettle helps manage your contract and facilitate your payment with the creditor or debt collection agency.

Below are other options for trustworthy debt settlement assistance.

• Pacific Debt Relief: Offers programs that last between one and four years. The company operates in 32 states, and you’ll need at least $7,500 in unsecured debt to qualify for their program. The cost for their services ranges from 15 to 25% of the total value of your debt.
• Freedom Debt Relief: One of the oldest debt settlement companies. Since 2002, the organization has helped thousands of people resolve over $10 billion in debt. Those signing up for a program can expect to make monthly payments to settle their obligations. Most people complete the program within two to four years. Fees range from 15% to 25% of the total value of debt.
• Accredited Debt Relief: A debt settlement company that helps individuals resolve unsecured debts. Like Freedom Debt Relief, those who sign up for the program will complete it within two to four years and pay fees ranging between 15% and 25%.

What are the best ways to contact a creditor?

If you’re ready to start the debt settlement process with your creditor, you can call, email, or send them a letter.

We recommend emailing since it gives you a written record of the conversation with your creditor. You’ll also have a chance to consider your creditor’s offer rather than being put on the spot.

However, if you’d prefer to speak directly with your creditor, you can call them. Calling is appropriate if you have extraordinary financial circumstances you want to explain or if you need to resolve the debt issue immediately.

Under N.D. Cent. Code § 12.1-15-02, one party must consent to record a call. The person giving consent is you. You don’t need the permission of your debt collector.

FAQs about how to settle a debt in North Dakota

People usually have many questions when considering settling a debt in North Dakota. Here are the most common inquiries.

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

We recommend offering 60% of the total value of your debt to your creditor in a settlement. However, if you cannot come up with that much, offer what you can. Your creditor will let you know whether they’re willing to consider your settlement or if they have another idea in mind.

Q. Can I do my own debt settlement?

Yes, it is possible to do your own debt settlement. However, you’ll need to prepare by learning about the process. Once you figure out how much you can pay in a debt settlement, contact your creditor and begin the negotiation. Make sure to get your agreement in writing before sending any money.

Q. How can a debt be collected in North Dakota?

Debt collectors will call and write you before they take up other collection activities. If you don’t respond to their notices, they may start a debt lawsuit against you. If they win the case, they’ll obtain a judgment allowing them to garnish your wages or freeze your bank account.

How to get debt relief in North Dakota

SoloSuit has several guides you can read concerning debt collection in North Dakota. Here are a few of them:

• How to Get Debt Relief in North Dakota | SoloSuit Blog
• How to Answer a Summons for Debt Collection in North Dakota | SoloSuit Blog
• North Dakota Statute of Limitations on Debt | SoloSuit Blog
• North Dakota Court Case Search — Find Your Lawsuit | SoloSuit Blog

Debt settlement is possible if you take the proper steps.

Now that you know how debt settlement works, you can try it yourself. Simply figure out how much you can afford to pay in a settlement and contact your creditor to make a deal. Once you have an agreement, get it in writing before transferring your money.

Want more help with debt settlement? SoloSuit has solutions.

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.

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