Sarah Edwards | January 10, 2023
Summary: If you’re facing a debt lawsuit in Vermont, you may not know what steps to take to settle the claim before your court date. You should focus on responding to the lawsuit, sending an offer to begin the settlement negotiation process, and getting the settlement agreement in writing. SoloSettle can help you with all of these steps. Read on to learn everything you need to know about debt settlement in Vermont.
If you’ve received notice of a pending lawsuit against you for debt in Vermont, there are steps you can take to settle the matter before your court date. A settlement protects you from the possibility of a court-ordered judgment, which will allow your creditors to increase their collection actions against you by garnishing your wages or freezing your bank account.
Settling your debt isn’t too complicated, but it takes a little time and know-how. You should also understand Vermont’s laws concerning debt collections. This article has everything you need to know to settle your Vermont debt.
Let’s jump right in.
You’ll want to follow three basic steps to settle your debt before your court date in Vermont:
A Vermont debt lawsuit begins when your creditor or debt collector files a Warrant in Debt and Complaint against you. These documents notify you of the lawsuit and list the reasons for filing the suit, which will likely include nonpayment of a debt. They also include the principal value of the obligation and any interest and fees.
While you intend to settle the debt before your court date, you should still respond to the lawsuit with an Answer. You have 21 days to respond to a debt lawsuit in Vermont, so be sure to file your Answer before the deadline. This will buy you the time you need to work out a debt settlement.
Your second step is determining how much you can offer in a debt settlement. Take an honest look at your finances, including your savings and the upcoming income you will have available. If you don’t have much money to scrape together to settle your debt, consider selling a few things you don’t need or asking family and friends for help.
We recommend you begin your negotiations by offering the debt collector at least 60% of the total amount you owe. For instance, if your creditor is suing you for $4,000, you’d offer them $2,400 in a settlement.
If you can’t afford to pay 60% of the debt, offer what you can to the creditor. You might explain your financial circumstances so that the collection agency understands your situation. They may be able to work with you to find a desirable resolution, like accepting less or extending your repayment for several months.
Expect to go through several rounds of negotiations. The creditor or collector will likely counter your original offer with a settlement offer of their own.
Be careful not to accept any offer you can’t reasonably abide by. If you do and then can’t make your payment, the creditor will likely restart the legal process.
Your next step is to get the settlement agreement in writing when you’ve reached an agreement. You don’t want to make any payments to your creditor until you have a signed agreement with all the details of your settlement outlined.
This agreement should contain the terms of your deal, including the amount you’ll repay, when it is due, and how you’ll transfer the payment. It should indicate that you’ve fully settled the debt upon payment and that no one can pursue you further for the remaining obligation. It should waive any further rights your creditor has to the debt.
SoloSettle will help you manage the debt settlement agreement documentation, but here’s a debt settlement agreement example for your reference.
You’ll notice that the example above requires a notary to sign for both parties of the agreement. Notarizing your contract provides additional legal protections should your creditor try to retract the settlement.
Let’s walk through the debt settlement process in Vermont with an example.
Example: Robert receives a Warrant in Debt in Vermont Ally Financial, claiming he owes $3,000 to the bank. Unfortunately, Robert can’t afford to fully repay that amount. After responding to Ally’s Complaint with an Answer, Robert uses SoloSettle to offer the company a settlement. Robert’s settlement offer is $1,800, or 60% of the total value of the debt. Ally Financial counters with an offer of $2,000, which Robert decides he can afford. After signing a settlement agreement, Robert transfers the money to Ally Financial, and the company drops the lawsuit against him.
Vermont adheres to the Fair Debt Collection Practices Act, which limits the activities a debt collector may take against a consumer. In particular, creditors and debt collectors cannot:
Under 12 V.S.A. § 511, creditors and debt collectors have six years to bring action against a consumer for oral, written, and revolving debts. A consumer may ask the court to dismiss the lawsuit if it exceeds that statute of limitations period.
In addition to these debt collection laws, 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 Vermont, 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:
If you need help settling your debt, you can find support from a settlement company. Here are a few of our recommendations.
Many consumers prefer SoloSettle over traditional debt settlement companies for a few reasons:
Below is a list of other great debt settlement companies to consider:
If you’re interested in starting the debt settlement process with a creditor, you can contact them via email, phone, or snail mail.
We recommend email since it’s fast, and you’ll have a written record of the communication. When you send an email, you’ll usually hear back from your creditor within the next business day.
If you prefer oral communication, you can call your creditor. If you do, you should record the phone call, but only after obtaining the debt collector’s express permission.
Vermont does not have a specific statute governing the recording of phone conversations. However, Vermont’s Supreme Court found it illegal for law enforcement agents to record conversations without a warrant in Vermont v. Geraw, 795 A.2d 1219 (Vt. 2002).
This court case suggests that all parties must consent to a recording of a phone conversation.
Most people have many questions when considering debt settlement in Vermont. Here are a few of the most common we hear at SoloSuit.
The percentage of the debt you offer to pay will vary depending on your personal circumstances. Debt collectors are more willing to accept offers that are at least 60% of a debt, but you may find that some will take less. Start with what you can reasonably afford and see whether your creditor will accept it.
It is possible to handle your debt settlement without the assistance of an agency. However, it will require you to adhere to a savings plan and negotiate with your creditors. Before attempting debt settlement on your own, you should learn about the process and understand debt collection rules in your state.
Creditors view full repayment of debt more favorably than a settlement. However, sometimes it’s impossible for consumers to repay fully. If you cannot fully repay a debt, settling it will protect you from a potential future lawsuit and stop adverse reporting on your credit report.
SoloSuit has several other guides you can review for help with debt settlement or similar actions. Here are a few of our articles about debt relief in Vermont:
Think of debt settlement as a means to rebuild your financial health. While settling a debt won’t positively impact your credit immediately, your credit score will improve over time. You also won’t have to worry about future litigation or harassing messages from your debt collector or creditor.
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