Sarah Edwards | December 15, 2022
Summary: If you are experiencing financial hardship, there is a good chance you can settle your debt for less with Discover. When consumers go months without making payments on a Discover card or loan, there is a chance the matter will be taken to court. If you’ve been sued by Discover for a debt, respond to the lawsuit to give yourself time to settle the debt. Discover has debt settlement programs for people who are burdened with debt, and settling for less can help you regain your financial footing.
Discover Financial Services is the third-largest credit card company in the United States. Aside from its massive footprint in the credit card sector, the company also offers traditional banking services, home equity loans, personal loans, and student loans.
Discover began in 1985 when Sears purchased a brokerage firm and real estate franchise intending to add financial services to its retail portfolio. Unfortunately, that plan wasn’t very successful, and Sears later divested its ownership in the company.
In the mid-1990s and early 2000s, a series of mergers led to the creation of an independent Discover Financial Services. Since then, the company has become a prominent force in consumer lending. Millions of people in the U.S. have Discover credit cards or other financial products with the company.
Despite the numerous customers that choose to do business with Discover, the company currently has a one-star rating with the Better Business Bureau. Discover customers frequently complain about its collection practices and differences between the credit offers they receive and the actual interest rates charged.
If you’ve got debt with Discover, you likely want to get rid of it quickly. Here are your options.
If you want to avoid any adverse impact on your credit score or credit report, it’s best to abide by your agreement's original terms and make regular payments. However, that doesn’t mean you can’t make a serious effort to pay your debt down quickly.
There are several ways to pay off your Discover loan, but you’ll need to find the money necessary to make more than your minimum payment. Ideally, you should double or triple the amount of your monthly installment.
If you don’t have much disposable income to put toward repayment, take a closer look at how you’re spending your money. You may be burning too much of your disposable income on unnecessary things like dining out or shopping.
If you can trim your budget and allocate more to your repayment efforts, your outstanding balance will decline significantly over the following months.
However, cutting your expenses isn’t always an option. Sometimes, too many other responsibilities eat into the amount you have to pay off your debt. If this describes your situation and you want to pay off your credit card quickly, you’ll need to find a way to earn more.
You might try taking on a part-time job or starting a side hustle. Use all or most of the money you earn from your extra job to pay off your obligation with Discover. The more you can put toward your bill, the quicker you’ll be able to free yourself from debt.
Debt consolidation may be an option, especially if you have a credit score of at least 650. Two potential options for consolidating your debt with Discover are a balance-transfer credit card or a debt consolidation loan.
A balance-transfer credit card is ideal if your Discover credit card has a high-interest rate. Most balance-transfer credit cards have interest rates of 0% for a minimum of six months. You can use the 0% interest rate to pay off your debt within the low-interest introductory period.
A debt consolidation loan might be more appropriate if you have multiple credit cards or other high-interest loans. You use the debt consolidation loan funding to pay off all of your debts, then make a single repayment to the debt consolidation lender.
If you choose to take out a debt consolidation loan, pay close attention to its terms and interest rates. It’s not worth borrowing the money if you’re not saving anything from the loan.
If Discover sues you for an old debt, you’ll want to take action immediately.
First, draft and file an Answer to the lawsuit. If you’re disputing their claims, mention the reasons why in your Answer. For instance, you may argue that the amount they’re suing you for is inaccurate or that you’re only an authorized credit card user.
Make sure you keep your responses truthful. While your objective is to settle the debt before your court date, there’s no reason to be dishonest. Fabricating financial details could get you into even more trouble.
Filing an Answer to the lawsuit will help you avoid losing the case automatically by a default judgment, giving you time to work out a debt settlement plan with Discover.
First, you need to determine how much you can afford to pay Discover in a settlement. You’ll want to make sure they take your offer seriously, especially if you know they have a strong case against you. An offer of at least 60% of the total value of your debt is ideal.
In fact, Discover has programs in place to help people who can prove they are experiencing financial hardship. For example, Discover's 60/60 plan can reduce your debt to 60% and allow you to pay it off over a course of 60 months.
Alternatively, you can reach out to Discover and make a debt settlement offer independently from any program. For instance, if you owe Discover $2,000, you can offer them $1,200 to clear your account and drop any lawsuits filed against you.
In your offer, include all information relevant to your circumstances, like the court case number and due amount. You might say something along these lines:
"I, [your full name], am experiencing financial hardship that is making it difficult to make my payments on time. I woud like to offer Discover you a lump-sum payment of $___ to settle the case with case number ___. You can accept or counteroffer. If you accept, respond to this message with only ‘Accept.’ If you want to counteroffer, respond with only ‘Counteroffer: [$xxx].’This offer expires in 6 days on MM/DD/YY. I will pay the agreed amount within 90 days of the settlement date."
Then, sit back and wait. Discover will likely respond to your email with a counteroffer. You may go through several rounds of negotiation before reaching an agreement you can live with.
Get your agreement in writing before transferring any money. That way, if Discover tries to come after you for the same account again, you’ll have the benefit of documentation.
Abide by the agreement and make your payments promptly. If you don’t make payment according to the terms of your contract, Discover can restart the litigation process against you.
Once you’ve resolved your debt with Discover, do your best not to end up in a similar situation in the future. Overcoming debt is tough, but if you put in the effort, you can move on from a difficult financial situation and end up wiser for it.
Check out this video to learn more about how to settle a debt:
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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.
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