Sarah Edwards | January 10, 2023
Summary: Having debts you can’t afford to repay is a big source of stress. If a creditor or debt collector has taken legal action against you, you may wonder whether you can settle the debt instead of going to court. SoloSettle is here to help you settle your debt in Utah before your court date.
Facing a debt lawsuit will make anyone worry about their financial future. No one wants to suffer the repercussions of losing a debt lawsuit, which may include a judgment that allows the creditor to garnish wages or even freeze bank accounts.
Fortunately, you have alternatives if facing a debt lawsuit in Utah. You can attempt to settle your debt before your court date, allowing you to save some money, resolve the issue, avoid a judgment, and start over financially.
You should understand the rules concerning debt collection and settlement in Utah and the best steps to take before starting the process. In this article, we’ll explain everything you should know to settle a debt in Utah.
Let’s get started.
We’ve broken down the debt settlement process into three easy-to-follow steps:
Now, let’s break down each of these steps in detail. Don’t like reading? You can check out this video instead:
When a debt collector or creditor decides to file a lawsuit against you, they’ll begin the process by filing a Summons and Complaint. The Summons notifies you of the lawsuit, and the Complaint lists the reasons the debt collector is pursuing legal action against you. They’ll probably state that you haven’t abided by the terms of your repayment agreement.
In the Complaint, the debt collector will also list the outstanding balance of your obligation, along with interest and fees.
Many people make their first mistake by failing to respond to the Complaint. When you don’t respond to a lawsuit, you open yourself up to a potential default judgment. Your creditor can ask that the court grant them a ruling in their favor since you haven’t defended yourself. This ruling is called a default judgment.
With a default judgment, creditors and debt collectors can garnish your wages, seize your property, and even freeze your bank account.
Even if you plan to resolve your case well before your court date, you should still respond to the creditor’s Complaint. Your response is known as an Answer.
You have 20 days to file an Answer to a debt lawsuit in Utah. Your Answer gives you the opportunity to defend yourself. You’ll list your reasons for nonpayment of the debt and your defenses.
A few typical reasons people use to defend themselves in an Answer include a lack of business relationship with the debt collector and expiration of the statute of limitations. However, many other defenses may be appropriate to your situation.
Your next step is determining how much you can afford to pay in a settlement. You should review the amount of money you have in savings and evaluate whether you’ll be able to save any more in the upcoming weeks.
If you don’t have much money available, consider selling a few objects in your home that you don’t need. You can also ask friends or family for help or take on a few odd jobs to earn quick cash.
We recommend that you start the negotiation process with an offer of around 60% of the total value of your debt. For example, if you owe $3,000 to a creditor, you would offer to pay $1,800 to settle under the 60% guideline.
If you can’t afford to pay 60% of your debt, provide an offer you can reasonably afford. You should explain your financial circumstances to the debt collector or creditor. They may be able to work with you to arrive at a reasonable payment arrangement.
Once you start the negotiation process with your creditor, it’s common to go through several rounds of bargaining before you reach an agreement. Before accepting any offer, make sure you can afford it. If you can’t reasonably pay it, the deal will fall through, and your creditor will proceed with the lawsuit.
When you have a deal with your creditor, make sure to get it in writing before transferring any money. A written agreement protects you if the creditor or debt collector decides to renege on their end of the contract.
Your agreement should contain specific information, including the amount of money you’ll pay to settle the claim, when the payment is due, and where you should send the money. Your contract should waive any further rights of the creditor to the remaining debt balance.
You can prepare your settlement agreement before the negotiations with your creditor. Once you have a deal, you’ll simply insert the relevant information before signing it and sending it to them. Here’s a debt settlement agreement example, for your reference, with a preview attached below:
You’ll notice that the agreement includes a place for a notary to sign for both parties. Notarizing your contract ensures that both you and your creditor have a witness for the terms of the deal.
Let’s take a look at an example of debt settlement in Utah.
Example: Emily is being sued by Bonneville Collections for a credit card debt of $3,000 in Utah. She has 20 days to respond before losing automatically, so she uses SoloSuit to draft and file an Answer. After taking a closer look at her finances, Emily realizes she has enough money saved up to pay off up to 80% of the debt immediately. She uses SoloSettle to send a settlement offer to Bonneville Collections, starting with a lower offer of 60%. After a few rounds of negotiations and counteroffers, Bonneville Collections agrees to settle for 75% of the debt value, or $2,250. Emily saves money, avoids a judgment, and gives herself a financial reset.
Utah's primary protections for debtors are through the federal government’s Fair Debt Collection Practices Act (FDCPA). The FDCPA places specific limitations on debt collectors. Under the law, debt collectors and creditors cannot:
Utah has statute of limitations laws that limit the time a creditor can pursue legal action against a creditor. Under UT Code § 78B-2-307 (2015), creditors can sue a debtor for verbal or open accounts for up to four years. UT Code § 78B-2-309 (2015) limits the collection of written accounts to six years.
If a creditor files a lawsuit against you for a debt outside the state’s statute of limitations, you can ask the court to dismiss the case. However, dismissing the case does not mean you don’t owe the money. Your creditor can continue to report your account to the credit reporting agencies, send you collection notices, and call you.
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 Utah, 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:
Several debt settlement companies can assist you through the settlement process. Here are a few of our top recommendations.
SoloSettle, powered by SoloSuit, is unique among debt settlement companies because it offers settlement services to those facing debt lawsuits, and it does not have a debt amount requirement. Where most debt relief companies require your debt to be at least $10,000 or more, SoloSettle can help you settle a debt of any size.
We proactively work with creditors and debt collectors to reach an agreement before the court date. Once you approve the settlement, we’ll manage the payment process, so you won’t need to give away your bank details or financial information.
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.
"SoloSettle really saved me a ton of time and heartburn and kept me from having to be my own lawyer in court.”
Once a consumer starts debt settlement with the help of Accredited Debt Relief, they’ll make monthly payments to the company. Most Accredited Debt Relief programs last between two and four years and have fees of 15% to 25% of the individual’s total debt.
Freedom Debt Relief is one of the oldest debt settlement companies in America. Since 2002, the company has helped thousands of consumers settle over $10 billion in debt. Like Accredited Debt Relief, Freedom Debt Relief charges fees of between 15% and 25% for its services.
If you’re ready to initiate the debt settlement process, you can call, email, or write to your creditor.
We strongly recommend email for communicating with creditors since it provides a written record of the conversation. You’ll also avoid being put on the spot by a debt collector, which can happen in a phone call.
However, if you prefer to communicate with the debt collector over the phone, you can do so. We advise that you record the conversation to refer to it if you need to. Under UT Code § 77-23a-4, you can record a phone call as long as one party — in this case, you — provides consent.
Most people have questions about debt settlement in Utah, especially if they’ve never tried it before. Here are answers to a few typical questions.
We recommend you offer at least 60% of your debt in a settlement. If you don’t have that much available, offering less is okay. Provide an offer that you can reasonably afford. The debt collector may be able to work with you if you explain your financial circumstances.
As long as a debt remains unpaid and unsettled, it is still collectible, no matter how old. However, debt collectors cannot pursue legal action against you for the debt once it passes the statute of limitations. Open and verbal obligations have a four-year statute of limitations, while written debts have six years.
Yes, it is possible to handle your own debt settlement. You’ll need to study how it works, then begin attacking your debts one by one. It’s possible to save money through debt settlement and alleviate your financial problems, but it will require some work.
SoloSuit has several guides with more information about debt relief and debt settlement in Utah. Here are a few you may peruse:
It is possible to improve your financial situation with the help of debt settlement. If you put in the work, save your money, and negotiate frankly with your creditors and debt collectors, you can avoid bankruptcy and slowly rebuild your finances.
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.
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.
Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.
"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather