Dena Standley | July 28, 2023
Edited by Hannah Locklear
Summary: If you’ve been sued for debt in Iowa, you can reach out to negotiate a debt settlement offer at any stage of the case. First, file your Answer to the lawsuit, then send a settlement offer. When an agreement has been reached, get it in writing. SoloSettle can help you negotiate your own debt settlement offer and settle your Iowa debt fast.
The threat of being sued in Iowa courts for a debt can be upsetting, but even once a lawsuit has been filed, there are still ways to fight back and win. With the help of SoloSettle, you can settle a debt before it ever proceeds to trial. Debt settlement saves you time, money and, most importantly, allows you freedom from the stress and worry that come with a pending lawsuit.
Settling a debt in Iowa consists of three basic steps. Let’s discuss those in further detail below.
You have been served with a Summons and Complaint, meaning a lawsuit has been filed. It can be tempting to toss it aside and try to ignore the problem. Even though you may feel nervous and defeated, the clock is ticking, and you have to take action quickly. If you were served with a Summons for debt collection, you have twenty days to file your Answer in Iowa.
Wait—the title states the article is about settling a debt in Iowa, so why do I need to file an Answer? Filing an Answer preserves your rights in a debt collection lawsuit. The Answer helps prevent the debt collector from asking for a default judgment to be issued by the court.
Default judgments are common when defendants toss the Summons and Complaint aside and don’t file an Answer. A default judgment can allow the debt collector to garnish your wages and come after assets, so it is crucial that you avoid a default judgment by protecting your rights and interest in the case.
An Answer, as the name implies, is a legal document that responds to a debt lawsuit. In your Answer, you should respond to each allegation in the Complaint and assert your affirmative defenses. SoloSuit’s Answer form includes a section for both your responses and defenses.
You can answer each claim from the Complaint in one of three ways:
After you’ve responded by filing an Answer, it is time to make an offer to settle the debt. Deciding how much to offer to settle the debt can be difficult. Your offer will depend on how much you can reasonably afford to pay toward the debt and how much the creditor is willing to accept.
Most debt collectors do not want the expenses associated with taking a case to trial, so they are often willing to settle for far less than the original amount owed. According to America Fair Credit Council’s Regan Report, the average consumer can reach a debt settlement of 50% when working with a debt settlement company.
However, a 50% settlement is not always easy to get. An 80% settlement is easy in most cases, as most creditors and debt collectors are willing to drop to that amount. Usually, we see debts settle for somewhere within that range. Around 60% is more common.
Knowing what percentage of the debt the creditor will accept in a settlement will depend on numerous things. Some of those include:
There is no magic formula to tell you how much to offer initially, but remember, negotiation is common in debt settlement, so a good rule of thumb is to offer less than the maximum you can afford to pay. That leaves you room to accept a slightly higher counteroffer if you feel it might be the best offer you will get.
Offer a lump sum settlement, as this offers the best incentive for a creditor to settle with you. Whether offering a repayment plan or a lump sum settlement, offer only what you can realistically pay.
Let’s take a look at an example.
Example: Joe is being sued for $8,000 owed to a credit card company. He used $6,400 of the credit card company’s money, and the rest was interest and penalties. The maximum amount he can pay back in a lump sum is $6,000. Joe makes an offer to settle the debt for $4,000. That amount is one-half of what the credit card company claims he owes, and it leaves him a little wiggle room if they counteroffer for a higher amount.
When both parties have agreed to a settlement amount, it is crucial that you get the agreement in writing. Taking the time to ensure that the entire context of the agreement is in writing will stave off attempts by debt collectors to verbally agree to a settlement only to resume legal action for the remaining balance.
This will prevent any sneaky debt collection behavior in the future, and it will protect you in case they go back on their word.
Here’s a real sample of a settlement agreement document:
Read a full debt settlement agreement here.
The Fair Debt Collection Practices Act and the consumer protection arm of the Iowa Attorney General’s Office protect Iowa consumers from deceptive, abusive, and unfair debt collection practices. Knowing your rights is the first step in determining if, when, and how you should settle a debt in Iowa.
If you feel that a debt collector has violated your state or federal rights as a consumer, file a complaint with the Iowa Attorney General’s office here.
§533A of the Iowa Civil Code outlines debt settlement practices and those licensed to offer debt settlement services to consumers. If you are struggling with debt, then it is likely you have seen advertisements or direct sales related to debt settlement programs. While Iowa allows such programs, knowing your rights and responsibilities as a consumer is crucial before engaging with a debt settlement provider.
The terms of service are often read to you at lightning speed, which is prohibited under §533A, making it hard to understand exactly what it is you agree to in a debt settlement plan.
Finding the best Iowa debt settlement company is about identifying which company best meets your particular needs for debt settlement. SoloSettle, which is a product of SoloSuit, differs from many traditional debt settlement companies. Below, let’s explore what makes SoloSettle unique.
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.”
Other reputable debt settlement companies include:
In general, it is best to keep all communication with a debt collector in writing. So, even if you contact the debt collector by phone, or have a personal meeting, be sure and put everything you discuss in writing and send a copy by certified mail to the debt collector.
With that in mind, you have options. You can negotiate a settlement offer via phone, mail, or email in Iowa. Below are some of the pros and cons of each method.
Phone: Debt collectors are trained in negotiation and count on no record of what they say, allowing them to lie, bully, or otherwise engage in nefarious practices. As such, it’s probably not the best idea to try and settle your debt over the phone unless you record the conversation. Iowa Code Ann. §808B gives you the right to record the phone conversation without the other party’s consentd. If you must handle all or some portion of your negotiations by phone, make sure you record the conversation. Otherwise, consider another method.
Email: Email is a good alternative to snail mail (though once negotiations are finalized and you have reached a settlement agreement, you should still provide a physical copy, via certified mail, to the debt collector). Email allows for quick communication while still keeping everything in writing. Finding an email address for the debt collector may be challenging because many prefer to restrict access to email communication, forcing consumers to rely on making phone calls. However, you can search online for an email address or request communication via email when talking to the debt collection company.
Iowa is an agricultural state, and the coronavirus pandemic hit the state’s livelihood hard, resulting in ballooning consumer debt. Consumers turn to credit cards to make ends meet, and far too often, the result is more debt than can be paid back. One late payment can cause interest rates to skyrocket, fees start to accumulate, and Iowans then find themselves quickly overwhelmed.
To learn more about Iowa debt relief, check out SoloSuit’s blog, How to Get Debt Relief in Iowa.
While the best solution is to pay your debts on time to avoid damaging your credit report and the hassle of dealing with debt collectors, unfortunately, reality means that it isn’t always possible to pay your debts on time.
Settling debt helps consumers and creditors avoid the expense and hassle of a court battle. Even if a lawsuit has been filed, many creditors are still anxious to settle a debt to avoid the costs of a trial. Remember, if you are served with a Summons and Complaint, make sure you file an Answer to protect yourself from a default judgment against you.
So, you’ve reached an agreement to settle the debt, and you are confident you can meet the terms of the settlement agreement. What happens next? Be prepared for your credit to take a hit. Late payments and debt charged off can stay on your credit for seven years, hindering your ability to borrow at reasonable interest rates. You can attempt to negotiate favorable credit reporting during the debt settlement process.
That being said, nothing hurts your credit more than an unpaid debt. While settling a debt will still affect your credit score, it won’t hurt it as much as not paying at all.
Make sure the settlement process covers the entire debt, including any penalties and fees, including fees included, if you choose to work with a debt settlement company that works off a fee basis.
SoloSuit wants to help you take the stress and worry out of dealing with debt collectors, even if they’ve filed a lawsuit against you.
SoloSuit’s products, such as a Debt Validation Letter, should be used the first time you are contacted by a debt collector to force them to prove that the debt belongs to you and that their information is accurate. If a lawsuit has been filed, you can use SoloSuit’s easy software to create and file an Answer, then start the debt settlement negotiation process with SoloSettle.
This calculator is for educational purposes only.
No matter what stage of the debt collection process you find yourself in, SoloSuit is here to help.
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