How to Settle a Debt in Rhode Island

Dena Standley | December 27, 2022

Rhode Island citizens have multiple debt settlement companies that can help consumers get out of debt. Legitimate companies use proven methods that are legal and supported by the government. They operate under strict laws to ensure consumers are not scammed.

When you choose debt settlement to manage your debts, you initiate contact with the creditor and offer to pay a small percentage of what you owe. After they respond with a counteroffer, you can increase your offer by a small margin and wait for their response. Once an agreement is reached and paid off, they will report the debt as settled to the credit reporting agencies and dismiss any lawsuits against you.

In this article, we will give you detailed information on how to go about the debt settlement process in Rhode Island and what you need to know to ensure the entire process is successful and adheres to state debt settlement laws.

Follow these 3 steps to settle a debt in Rhode Island

Delinquent accounts are a huge setback for creditors. Often, they would rather settle for less than lose all their money. If you've missed payments for several months, this is the perfect opportunity to make a settlement offer.

However, if you've received a lawsuit, you may have no option but to initiate a settlement. The alternative can mean the creditor receiving authorization to garnish your wages or access to your bank account. Follow these steps to avoid such an outcome:

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

Below, we’ll break down each of these three steps in detail. If you don’t like reading, you can watch this video to learn more instead:

1. Respond to the debt lawsuit with an Answer

Filing an Answer informs the court that you are aware of the lawsuit and are ready to appear in court to defend yourself. If you fail to send an Answer, the court continues with the case and may decide in favor of the creditor or debt collector. Hence, file the Answer before initiating the negotiation process.

According to Rhode Island laws (RI Gen L § 33-23-1), you have 20 days to file an Answer, or you may lose the case automatically when a default judgment is entered against you. This can lead to wage garnishment and seizure of your property, so it’s very important to respond on time.

To draft your Answer, respond to each of the allegations listed against you in the Complaint document. In Rhode Island, you can use three ways to respond: admit, dent, or deny for lack of knowledge. As a precaution, do not admit to all the allegations, even if they are true. Force the creditor or collector to prove their case in court.

Next, list your affirmative defenses. The defenses you give can help your case if the creditor wants to continue with the case in court. SoloSuit’s Answer document lightens the task for you by drafting your Answer for you. You can customize the Answer to apply to your case and debt situation.

Responding to your debt lawsuit will buy you time to reach out about settling the debt.

2. Make a settlement offer to start negotiations

Once you have filed the Answer and confirmed receivership, choose the most favorable method to negotiate for a settlement. The do-it-yourself approach is good if you have excellent negotiation skills, while hiring a debt settlement company ensures you do everything exceptionally well with the help of experts. Factors to consider before sending an offer are:

• How much can you afford to pay off? Avoid making a settlement offer if you don’t have enough money saved for negotiations. The creditor may not take you seriously if you have to ask for time to get the money. Cut back on expenses for several months if you need to save enough money to settle the debt.


• How much will the creditor or collector accept? If you give a creditor an extremely low settlement amount, they are likely to reject it and would rather try their chances in court. Ideally, an original creditor accepts between 60–80% of the original debt, while a debt collection agency that bought the debt might take between 10–60%. A settlement company can give you the best percentage for negotiations.

Taking all the above into consideration, the average consumer reaches a debt settlement agreement of 50% of the original debt value when working with a debt settlement company.

In our experience, a 50% settlement isn’t always easy to get. Try sending your first offer at around 60%. You might say something along these lines:

“I see you’re suing me for [$__] for [case number]. I don’t have that kind of money and I don’t agree with the amount. But I do have [$__] that I can pay within 30 days to settle the debt in full. Let me know if you accept.”

You may go through several rounds of counter offers before you reach an agreement.

If you can’t afford to pay off a large percentage of the debt right now, you can explain your financial situation to the creditor or collector. If you can demonstrate financial hardship, they will likely work with you.

SoloSettle negotiates a settlement for you.

3. Get the settlement agreement in writing

When you have reached an agreement, getting the settlement agreement in writing locks in the deal. Some debt collectors are known to scam you, accepting an offer verbally and then sneaking behind your back in court to continue with the case. Without a written agreement, the creditor may be tempted to break their promise and ask you to pay the balance so that they can withdraw the court case or update your credit report.

To remain on top of the negotiation process, always ask for a written settlement agreement. If the debt collector refuses, do not give them your money until you have agreed on terms and have it in writing. Here’s a debt settlement example, so you know what to look for.

SoloSettle is the easiest way to settle your debt

SoloSettle is a web tool for consumers needing help with the entire debt settlement process. Generally, it helps you reach a settlement agreement with creditors on your terms. The tool provides a structured process that allows you to send and receive offers from debt collectors.

Additionally, it drafts the offers for you, protecting you from dishonest collectors. The legal language included also protects your rights, and the creditor will be reluctant to bully you into accepting their demands. Once you reach an agreement, SoloSettle will ensure you get a settlement agreement that includes all the vital information.

Let's look at a real-life scenario.

Rhode Island debt settlement laws can protect you

Debt settlement laws and Rhode Island Fair Debt Collection Practices Act prevent debt management companies from taking advantage of distressed consumers looking for a way out of debt. It contains laws that control how much they can charge, the promises they can make, and how to handle consumers respectfully. For example, under the fees and charges section (RI Gen L § 19-14.8-23), the guidelines state that debt settlement companies should not:

• Receive any payment until they enter into a signed contract with the debtor
• Charge more than $50 as a consultation fee
• Charge a monthly fee exceeding $10
• Charge upfront fees without initiating a settlement deal with the creditor

If the settlement company you're working with violates these laws, report them to the consumer protection division in the attorney general's office.

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 Rhode Island, 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?

When a debt settlement company gives you a deal that’s too good to be true, you should not trust them as the best company to work with. A legitimate company will not lie to you about your debt situation and will implement a plan to get you out of debt before asking for money. Consider working with the following settlement companies:

• SoloSettle: This company allows you to settle a debt of any amount and does not require higher debt values like other debt settlement companies. In addition, it has legal defenses built into the app that you can use to block lawsuits if the creditor threatens you with one.


• National debt Relief: This company gives you a free savings estimate and does not charge upfront fees or force you to work with them after assessing your situation at no cost.


• Credit.org: This organization has been in business for over forty-five years and has a record of helping consumers become debt free without filing for bankruptcy.


• New Era Debt Solutions: The experts here give you a free debt analysis and recommend the most favorable plan to get you out of debt quickly.

Choose the best method to contact the debt collector

Part of the debt settlement process involves communicating with the creditor until you come up with an offer that pleases both parties. To achieve this, use a method you are comfortable with and one that will give you results. Choose one of these methods to communicate with creditors.

• Phone: A conversation over the phone can get you a settlement deal, but you won't have proof of the interaction unless you record the conversation. The chances of the creditor going back on their word is high. Luckily, Rhode Island is a one-party consent state, meaning you can legally record the phone conversation (RI Gen L § 11-35-21).


• Mail: This method ensures you have a paper trail of the negotiation process. However, the process takes longer unless both parties use certified mail to hasten the process.


• Email: Most debt settlement companies prefer this method because it instantly yields results. You can have a settlement deal within minutes or hours if you use the correct email.

How to get debt relief in Rhode Island

You can experience debt relief using three main methods; debt settlement, consolidation, and bankruptcy. It is vital to learn more about the other two methods before deciding how you will manage your debt. The following article will give you all the information you need on debt relief in Rhode Island. You'll also find a list of organizations that can help.

SoloSettle can help you settle your debt

Helping consumers become debt free is our ultimate goal at SoloSuit.

SoloSettle, powered by SoloSuit, is a tech-driven debt settlement solution that empowers you to settle your debt on your own in a few simple steps.

SoloSettle’s software sends and receives settlement offers for you. SoloSettle takes care of all communications with the creditor or debt collector, and once an agreement is reached, manages the documentation and payment for you.

Here are some reasons that SoloSettle is different from other debt settlement companies:

• You can settle debts of any size with SoloSettle. Many debt settlement companies require you to have a debt over $15k.
• SoloSettle actively attempts to settle your debt, whereas many debt settlement companies take a more passive role, waiting for settlement offers to come to them.
• SoloSettle is offered by SoloSuit, a trusted brand and a legitimate company. Many traditional debt settlement companies are actual scams.
• 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 provide legal defense; if you’re sued for a debt you are on your own.

If you’re still not convinced, this review from a real SoloSettle customer might change your mind:

“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.”

Settle your debt in Rhode Island with SoloSettle’s help.

FAQs on debt settlement in Rhode Island

What should I include in a debt settlement agreement?

• Your details as they appear on the debt account
• How much you settled on paying
• The promise the creditor made in exchange for the payment
• Citation of relevant laws
• Signature of both parties

How do I become debt free with debt settlement in Rhode Island?

Debt settlement helps you become debt free by enabling you to pay off a debt for less than you originally owed. For some consumers, coming up with the entire amount may be challenging, and settlement is the only way out. Additionally, debt settlement can help you save money for paying other debts.

Are debt settlement companies in Rhode Island legitimate?

Not all debt settlement companies are legitimate. Some want to scam you for the little money you have left. Others make extreme promises to convince you to deposit the money then they disappear after you make several payments. Ensure you investigate any company you want to hire for settlement online.

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.

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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.

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• Revenue Group
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• Second Round Sub LLC
• Security Credit Services
• Sherman Financial Group
• Suttell and Hammer
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• Tulsa Teachers Credit Union
• UCB Collection
• Velo Law Office
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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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