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How to Settle a Debt in South Dakota

Sarah Edwards | December 02, 2022

When you reach a debt settlement agreement ^^

Summary: If a creditor is suing you for an unpaid debt in South Dakota, you’ll want to address the problem quickly. SoloSettle can help you negotiate a debt settlement before your court date, allowing you to pay less than what you owe and resolve the matter quickly.

Is a creditor or debt collector chasing you for an unpaid debt? Have you received notice of a debt lawsuit against you in South Dakota? If so, you’re not alone. Thousands of people face debt lawsuits across the U.S. every day.

Whatever your reason for not paying the debt, you’ll want to take action quickly to avoid a default judgment. A default judgment allows the creditor or debt collector suing you to garnish your wages, freeze your bank account, or even seize your property. It’s best to avoid the headache of a debt lawsuit and settle the matter before your court date.

Read on to learn how to settle a debt in South Dakota.

Follow these steps to settle your debt in South Dakota

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

You can settle your debt in South Dakota on your own with SoloSettle and avoid having to hire a debt settlement company.

Now, let’s break down each step in detail. Don’t like reading? Check out this video to learn more about the debt settlement process instead:

1. Respond to the debt lawsuit with an Answer

All debt lawsuits start with a creditor or debt collector’s Complaint. In the Complaint, they’ll identify the debt they’re suing you for and the amount. They’ll probably include a breakdown of the amount, including the original balance, interest, and fees.

Once you receive your copy of the Complaint, you should examine it carefully. Note the critical information and compare it to your records. If any of the information is incorrect, you’ll want to clear it up in your Answer. For instance, if the alleged debt amount is inaccurate, you can dispute it.

Most attorneys recommend that you deny as many claims against you as possible, forcing the creditor or collector to prove each one. If they can’t, they might just drop the case altogether.

Next, you must file your Answer into the case before South Dakota’s deadline, which is 30 days. Send a copy to the opposing lawyer after filing the original Answer document with the court that has jurisdiction over the claim.

Check out this video to learn more about how to Answer a debt lawsuit:

While your goal is to settle your debt before your court date, thus eliminating the need for a lawsuit, filing an Answer ensures that the creditor can’t obtain a default judgment through sneaky tactics (like failing to mention you’ve settled the debt).

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2. Make an offer to start settlement negotiations

Determine how much of the debt you can afford to pay the creditor. Ideally, you’ll want to start by offering at least 60% of the debt’s value. That’s enough for the creditor to see you’re serious about settling.

Many debt collectors and creditors will counter your offer with one of their own. You might go through several rounds of bargaining before reaching a settlement agreement.

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. That being said, debts settle for a very broad range of amounts. How much the debt actually settles for depends on the answers to a variety of questions:

  • Is it a signed promissory note or book account?
  • Is there a meritorious defense?
  • Are there any offsets?
  • Is it interest bearing?
  • Is there a valid fee-shifting provision? A fee-shifting provision requires the borrower to pay the cost of collection.
  • When was the last payment?
  • Is the debt owned by the original creditor or has it been assigned to someone else?
  • Is it part of a federal or state loan program or is it a private loan?
  • Is it secured credit?
  • Is it dischargeable in bankruptcy? Is it a student loan?

Answering these questions will give you a better idea of a realistic settlement offer. But like we said, 60% is a good place to start.

Remember that time is of the essence. You’ll want to start the case quickly, long before your court date, to give the creditor time to negotiate with you.

You should start the negotiation via email. That way, there’s a written record of the negotiation process. It’s also quick; you won’t need to wait for the post office to send and deliver your letters concerning the negotiation.

SoloSettle’s software takes care of the negotiation process for you.

Now, let’s look at an example.

Example: Sue owes $3,000 to a credit card company. She uses SoloSettle to send a settlement offer of $1,800, which is 60% of the debt’s value. The company responds with a counterclaim of $2,500. After a few more rounds of negotiations, Sue reaches a debt settlement of $2,300. She saves money and can have peace of mind now that she doesn’t have to constantly worry about this looming debt.

3. Get the settlement agreement in writing

After several rounds of negotiation, you’ll reach an agreement with your creditor. When you do, make sure it’s a settlement you can follow through with; if you can’t afford to pay it, your creditor will likely restart the litigation process against you.

You’ll also want to get the agreement in writing. Usually, the creditor or debt collector will prepare this document for you. Be sure to review it carefully before signing. Here’s a debt settlement agreement example.

You’ll note that the example required a notary to sign for both parties. Notarizing the agreement provides additional legal protections. You’ll have witnesses who can vouch for the agreement's validity, ensuring that your creditor can’t come after you for the remaining balance due.

It’s important to follow the terms of the agreement. When you send your payment to the collector, we recommend using certified mail. Certified mail provides you with a routing number you can use to track the delivery of the payment.

You should also keep a copy of the check you send and your bank statement showing the payment clearing your account.

Let SoloSettle manage your debt settlement agreement for you.

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

South Dakota has adopted the Fair Debt Collections Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA), which are federal regulations concerning debt collection. There are no additional state laws concerning debt collection practices.

The FDCPA does not allow debt collectors to:

  • Call the debtor at odd hours, such as before 8 a.m. or after 9 p.m.
  • Use false threats or profane language in their communications with the debtor.
  • Call the debtor repeatedly throughout the day.
  • Let the phone ring continuously if the debt collector doesn’t answer.

In addition, the collector must validate the debt if the consumer asks them to.

Under the FCRA, creditors are required to follow these rules:

  • Remove negative information after seven years.
  • Notify the consumer if a creditor or potential employer uses information in their report against them.

South Dakota has a statute of limitations for pursuing a lawsuit for consumer debt. Debt collectors can no longer pursue the consumer in court if the debt passes the statute of limitations.

The table below outlines the South Dakota statute of limitations on debt:

Statute of Limitations on Debt in Vermont

Type of Debt Deadline
Open accounts
Claims of fraud
(S.D. CL § 15-2-13)
6 years
Foreign judgments
Other actions not provided for
(S.D. CL § 15-2-8)
10 years
Domestic judgments
Sealed instruments not including real estate
(S.D. CL § 15-2-6)
20 years

If your debt is past the statute of limitations, your debt collector or creditor cannot sue you in court. A court will dismiss any lawsuit they file. If you believe your case is past the statute of limitations, you should include that information in your Answer to the debt collector.

What’s the best debt settlement company?

The following are a few excellent debt settlement companies that will work with you to settle your debts.


SoloSettle is the only debt settlement company with a solution for individuals sued for debt. SoloSettle can help you settle any debt amount and handles the entire settlement negotiation process so that you never have to talk to debt collectors. Once we have an agreement you’re satisfied with, we’ll handle the payment; you won’t need to provide your debt collector with your payment details.

When a settlement agreement is reached, SoloSettle manages the settlement agreement documentation for you and protects your sensitive financial information from the collectors, preventing them from over-charging you.

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.”

National Debt Relief

National Debt Relief is one of the oldest debt settlement companies. It works primarily with credit card debts and can help you set up a payment plan for settling your obligations with your creditors. Most programs last between two and four years, and you must have a minimum of $10K in debt to qualify.

Accredited Debt Relief

Accredited Debt Relief helps people settle unsecured debts, including credit card loans, personal loans, payday loans, and medical debt. Programs last anywhere from one to four years, and you must have a minimum of $10K in debt to qualify. Accredited Debt Relief charges between 15% and 25% of the total value of your debt for its services.

What’s the best way to contact my creditor to arrange a debt settlement in South Dakota?

You can make an settlement offer through mail, email, or phone. That being said, it’s best to communicate with debt collectors in writing.

Mail is a good option because you’ll have documentation of each step of the settlement process, but the disadvantage is that it takes a long time to send and receive letters.

Email is a good middle ground, because it’s instantaneous (like a phone call), but it also helps you get everything in writing (like mail). The only downside is that it may be difficult to find the right email address for your creditor or debt collector.

If you decide to call your creditor, it’s best to record the phone call. Under SD Codified L § 23A-35A-20, only one party has to consent to record a call in South Dakota. In this case, you are the person consenting to the recording.

Recording your call helps ensure that the debt collector doesn’t try to deny that you settled with them. Still, once you get an oral settlement agreement, you should also ask for a written, signed agreement before sending the money.

FAQs on debt settlement in South Dakota

Below are a few questions we frequently hear about debt settlement in South Dakota.

What percent should I offer to settle a debt?

It depends. Some creditors will accept 30%, while others require much more — sometimes up to 80%. We suggest starting with 60% of the debt’s value. Your creditor will consider your offer and determine whether it’s fair. If not, they’ll provide you with a counteroffer.

Can I do debt settlement on my own?

Yes, you can handle the debt settlement process on your own. However, make sure to follow the instructions in this guide. You should make sure that you get your agreement signed and notarized in case you need to refer to it.

Is it better to settle a debt or go to court?

If you know you owe the money and don’t have much recourse to your creditor’s claims, it’s better to settle the debt. Settling the debt allows you to avoid a potential judgment against you. You’ll also forgo any further collections activity from the debt collector.

If you choose to go to court, be aware that the judge may not find in your favor. To support your case, you should have a solid Answer to the creditor’s Complaint that outlines your reasons for nonpayment.

Use out other guides on dealing with debt in South Dakota

We have a few other guides concerning debt in South Dakota that provide even more information:

Settling a debt in South Dakota is possible and can save you money

Breaking free from debt is often a huge relief. If you cannot completely repay your unpaid debt, settling it is a viable alternative. Following our steps, you can obtain a favorable settlement that allows you to move on from your old debt.

SoloSuit wants to help. Reach out with questions today, and we will do our best to help you get back on the right financial track.

What is SoloSuit?

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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

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