How to settle a debt collection lawsuit (In 3 parts!)
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- Опубликовано: 23 июл 2024
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HOW TO SETTLE A DEBT COLLECTION LAWSUIT
Strategy
Tactics
Aftermath
Strategy
Settlement is usually the best option if you owe any part of the debt. File an Answer, then settle.
About one in 13 consumers with a credit record has made a debt settlement agreement on one or more of their accounts
File an Answer
Do nothing
Do something invalid
Try to settle too early
Bankruptcy?
Karina P
I got hit with a law suit and starting looking up information online. I found Solosuit and decided to try them out. At first I was just interested in their free services. But I ended up going with a higher option and made the purchase for their service. They literally printed and mail my documents that day. It was very easy to complete the forms and upload the documents. I was initially worried of course, didn’t know if it was a scam or if the courts would accept the documents. The courts accepted the documents and received them within 3 days. I definitely recommend them! Great & fast service. Definitely legit! Thanks again!
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Tactics
File an Answer
Within 30 days, send a Debt Lawsuit Settlement Letter
Determine lump sum target amount
How much money do you have on hand now? How much can you have in a month?
Debt buyer, offer 1%-60%. Bought for 8%. If they settle for 10 percent of the debt, they will earn 2 percent.
Original creditor, offer 20%-70%.
Lump sum allows you to settle for less. Payment plans, you’ll pay more.
Avoid payment plans
Ackerman approach
Set target price
first offer 65%
Use empathy nos (How am I supposed to accept that? It’s really embarrassing, but I can’t accept it)
Three raises: 85% 95% 100%
Use non-round numbers on final offer
Throw in nonmonetary
Insert clip from debt-pay-off video of me negotiating down debt on the phone. Clip can be pretty short (less than a minute).
When they accept, create a settlement agreement.
The dollar amount
“Settlement in full”
Case number
They will file dismissal with prejudice.
Date
Send payment, check is probably easiest.
Cashier’s check or money order
Follow-up to ensure they file for dismissal.
[BREAK]
Aftermath
How will it affect my Credit report?
You’re credit score will go down.
The impact will be worse on higher scores.
Credit scores are dinged because you aren’t paying back the money in accord with the original agreement.
35% of FICO’s credit score relates to payment history. 30% to amount owed.
If the lender agrees, your debt is reported to the credit bureaus as “paid-settled”
This is better than a charge-off.
But it doesn’t mean the same thing as “paid as agreed”
Try to negotiate to have it reported as “paid in full”
A Debt settlement stays on your credit report for 7 years
Current accounts have the biggest impact on your credit score. So don’t risk missing payments on current accounts to settle an old one.
Most people get 60%-30% hacked off of the debt, according to the AFCC
Settling has less of an impact if the account is delinquent.
[BREAK]
Taxes
10% to 37% for 2022
Taxes are progressive, you’ll be taxed more as your income increases.
The difference between the settlement amount and the total amount will be considered taxable income. The difference is called “cancelled debt.”
Generally you must include the debt in your income. Exceptions and exclusions apply.
Student loans are a common exception
Exclusions: bankruptcy, insolvency (the amount of debt you owe is greater than all of your assets.
The collector may send a 1099-C to you and give notice to the IRS.
[STOP] 
Хобби
Your the only. One who addresses these finer points in this type of case, original creditor,
Thank you,
Happy to help.
I am so grateful for SoloSuit. I felt so helpless (really took a toll on my mental health) when I got served but SoloSuit walked me through this and I was able to handle this very scary and uncomfortable situation. Thanks guys.
Glad we could help. Good luck with your case. We hope you win!
Thankfully I live in Texas where my wages cannot be garnished and creditors can only be granted access to bank accounts they have on file for you. So in Texas, if you just move your money to a new bank, they literally can't get a cent from you. They can place a lien against you house, if you own one, but ONLY if you do not have a homestead expemption. Also, $100,000 of your personal property is protected, including your car. Texas is the goat state to get sued by a credit card company lol.
Don't mess with Texas!
Is that actually true ? All of it? So like aren’t we basically good if we’re in Texas ? lol besides the credit score going down obviously lol
Awesome video, thank you for the tips!
We're rooting for you!
Great information explained very clearly.
Glad it was helpful!
Awesome information thank you
You're welcome! Glad we could help.
1099c = a sales tax on taxed income that you didn't actually spend (expense), especially since most debt is not the principle but the interest paid (as in 36% credit card interest, that you cannot write off as an expense to begin with). What a racket.
Nice!
Hi! I have some questions. The settlement agreement is for me to keep and for the collector/creditor. Then how do we make sure they filed a motion to dismiss with prejudice and make sure the court has approved it? What information do I need to find out?
Typically, as part of the settlement agreement, the creditor/collector will have you sign court docs that outline the agreement and state that the case is dismissed upon settlement.
I want to settle my credit card debt. I plan on sending them a letter explaining my situation. The worst they can say is no. My question is which address is best to send it to. The one that the payments go to or the "card services" address. There are different addresses on the statement.
I saw in another video that you spoke about arbitration. Would that not be a good move if you were being sued by the original creditor and sent interrogatories? Just trying to make sure that I fully understand.
If you're being sued by the original creditor, and your credit card agreement contains an arbitration clause, filing a Motion to Compel Arbitration can push the case out of court and help you settle the debt through an arbitrator. The arbitration process is generally expensive, so must creditors want to avoid it. However, it all depends on what is stated in your card agreement.
The Consumer Financial Protection Bureau has a database that contains most credit card agreements. You may be able to find yours there:
www.consumerfinance.gov/credit-cards/agreements/
What about offering as a settlement, a deed to a piece of property where I paid about the same price as " the amount they claim they are owed?
I am on SSA and I know that's judgment proof but this property wasn't bought with SSA funds.
It probably depends on your state laws. You may need to reach out to an attorney to ask this question.
Get sued for medical bill $4500 . I talk to attorney about it he said medical bill it’s sometimes no easy to settle for lower amount. I file answer and call plantiff attorney to settle to refused. Just I set up payment plant $50 a month. Plus court cost.
Debt settlement really depends on the creditor, debt collector, and type of debt involved. There are a lot of factors that can play into it. If you can set up a payment plan on a medical bill, they generally do not accrue interest, so it's a smart move. Glad you were able to set up a plan.
My friend got a subpoena/summons what should she do… it’s for medical bills
Your friend can use the SoloSuit Answer form to respond to the lawsuit. The form works in all 50 states, and we can file it for her too.
Are you sure they can still garnish when you file BK? I think it’s stops everything!!
Right, once bankruptcy has been successfully filed, your wages can no longer be garnished for debts that have been eliminated. But while you are thinking about filing for bankruptcy, they can still garnish your wages.
Hello, third party sue me in court. But that debt is not on my credit profile no more because the debt is old and fall/came off my credit profile. How can i respond in court?
Sounds like it could be an invalid debt? You should check the statute of limitations in your state to make sure the debt is still valid, and if it is, you probably want to respond to the lawsuit.
Check statute of limitations: www.solosuit.com/posts/statute-limitations-debt-by-state
Respond to the lawsuit: www.solosuit.com/debt_answer
When communicating with the banks do we do it via phone or email?
Most banks don't communicate through email, but getting your conversation in writing is really important. So you might consider doing a voice recording of your phone calls so you have proof of any agreements you reach with the banker.
Can a debt collector still garnish your checks if it shows on your credit report, they settled for less than amount owed?
It depends on the terms and conditions of the debt settlement agreement. Did you get yours in writing?
Should you still deny everything in an answer to a summons when you are still intending to settle?
Most attorneys recommend denying as many claims as possible, while still be truthful. This will force collectors to prove their claims, and if they can't, it will hurt their case.
I am being sued by PRA, I immediately filed an answer with the courts and sent a copy to PRA. A week later I received confirmation of my answer from the court and emailed a settlement offer to PRA using the email address listed on the paperwork I was served with. It has been over 7 days now and I have not got any response from PRA.. What should I do next?
Sometimes it is a waiting game. You might want to call PRA to check that they received your email. They will probably try to discuss settlement with you over the phone.
Does the credit card company need to show a signed agreement for the debt to be valid in court? I was informed that when requesting validation or verification of a debt, credit card companies do not need to produce a signed agreement to prove the debt is valid and that I owe it. Is this true?
I sent a validation letter to the original creditor's lawyer as part of my lawsuit answer. In response, the lawyer sent back all the credit statements but no signed documents. Exhibit A was just the credit agreement without a signature. A free legal aid lawyer in court told me that they do not need to show a signed agreement to win the case. Is this correct for a case in New York City?
Every state has different rules, but if a legal aid lawyer told you that information, there's a good chance it is true.
If you think the debt is invalid, you might consider disputing it further with the FTC.
So one has to file an answer first, then send the debt settlement letter? Just want to be clear and not skip steps. My court date is coming up and I'm so lost😢
Filing an Answer first will prevent default judgment and give the defendant time to work out a settlement. This is why it is a good move, in many cases, to respond to the lawsuit and then reach out to settle.
Can you send me forms for disability not working judgement proof
You can probably find the forms you are looking for with the following Google search: judgment proof disability forms (state you live in)
Is there a form to fill out your response? If so how do I get it
You can fill out a form to respond to your debt lawsuit here: www.solosuit.com/debt_answer
Is it ridiculous to be sued by a debt collection agency over $2400? Only $1200 being the principal balance. I feel like they are desperate and going out of business or something. Its seems like such a small amount for a collection agency...
While it is ridiculous, it is not uncommon. We see cases under $1,000 frequently.
I’m currently being sued for 1500 bucks:/
@scarlet423 I filled out a response then called the agency and got a confirmation that they would not proceed with the case if I kept my payment plan in place, I ended up settling for a lump sum of 1k up front and 500 in payments afterwards, then they requested the case be dismissed with predjudice (meaning it can't be brought again). Hope this helps you.
@@marydetray6776 I appreciate that, that’s what I’ll do, I filled an answer and sent those out with the SoloSuit! And now I’ll wait till they receive that to then give them the settlement letter! I think that’s a good plan!
If you pay month to month will you have to file taxes if you are disabled
I'm not sure what you mean by "pay month to month," but generally, any debt forgiveness is considered taxable income.
what if I dont have money to pay a lump sum? thisis why im in this position in the first place. lol they sent me a summons without even sending a letter telling me i have debt.crooks!
If you don't have enough to pay a lump-sum, our service, SoloSettle, can help you negotiate a payment plan. It doesn't have to be lump-sum.
Do you have to wait until getting sued to use this settlement tactic with a big debt collector?
Definitely not! You can reach out to settle at any stage of the debt collection process.
I got sent a summons for a medical debt that’s $270. I’m so scared.
No need to be scared! You still have time to settle the debt or fight the debt in court. Check out our website for resources on settling your debt (www.solosuit.com/solosette) and fighting the debt in court (www.solosuit.com/debt_answer)
If you get subpoena with medical bills
If you've received notice of a medical debt lawsuit against you, it is important to respond to the lawsuit before your state's deadline. Otherwise, you run the risk of losing by default judgment.
And I was told that legally, they can’t even take money out of my grandma’s account even if she does not respond to the court filings because she’s retired and her pension is protected and she’s on Social Security she she doesn’t California by the way
Learn more about income that is protected from wage garnishment in our other video: ruclips.net/video/Gb0jdip00cw/видео.html
can social security be garnished by debt collector
Most state laws protect social security income from garnishment.
I didn't get served. I just got a court date to show up. Can i still settle?
This would be dependent on the specific case, but you should be able to settle. Here is a general article on settling debt: www.solosuit.com/posts/make-debt-settlement-agreement
I am angry that some company can buy old debt and sue me over it. I made NO deal with them, and it isn't any of their business, I do not owe them anything and flat refuse to pay them anything. We are going to court and I'm going to represent myself. I don't want to lose it but if I do I'm on SSI-D so it is a lose/lose for them, but I sure hope I crush them
It's a frustrating situation for sure. Kudos to you for being empowered and fighting back. We hope you win the case. Keep us updated!
You can't win if they sue you in court! If they can prove the debt is valid, you can't win in court. Settlement is good.
@@troytruong8246 Not true, most people lose in court because they don't answer and get a default judgement against them,. You CAN win in court and many people do. They can't prove the debt is valid, it is all based of hearsay, they will not produce the forward flow agreement. Settlement is bad.
@@troytruong8246 not if the debt is uncollectible specifically is the only source of income is SSI SSD.
@@troytruong8246 not good if you cant pay it! i only make 600 bucks a month! they dont want my suggested payment plan.
Im in ontario and being sued by Canadian tire bank for 16000. Im on ontario disability i cant pay a lump sum i have no money . I can only pay 100. A month what do i do . My mental health is not good im so scared please help ❤
Our services are mostly for cases in the United States, but if you are able to work out a payment plan, it might be your best bet as settling the debt.
Can u settle on restitution
these sources might be helpful in answering your question:
www.justice.gov/criminal-vns/restitution-process
prisonprofessors.com/what-should-i-know-about-restitution-orders-for-white-collar-crime/
If I plan to settle do I still need to file an answer in ohio?
Actually you spoke on this but how will proceedings with the court follow after sending an answer? Is the next step just the judgment by the judge?
It depends on what type of court has jurisdiction over your case. You may have to appear in court for a hearing or trial. If you have a scheduled court date, be sure to attend. Otherwise, there is a chance that your creditor or debt collector will dismiss the case before the court date, and in that event, you probably won't have to attend.
HOW DOES IT WORKS FOR A 500.00 DOLLARS DEBT COLLECTION?
🤣🤣🤣🤣🤣
The process is generally the same. However, we've noticed that some creditors and debt collectors are more willing to accept a debt settlement when the debt amount is higher.
I owned $ 2,369.75 portfolio sued me and started getting money since October 2022 and now portfolio is still picking my money.Is there a way to assist me please?
It sounds like your wages are being garnished. Did you ever have a chance to respond to your original lawsuit, or did you lose by default? Generally, people who have lost because of a default judgment can file a Motion to Set Aside Judgment. If granted, this type of motion gives consumers another chance to respond to the lawsuit and potentially stop garnishment orders.
Why would you start negotiating at 65% then go up to 90 if you don’t have that money to spend
First, determine how much you can afford to pay. Then, make an offer at 65% of your target goal. If they don't accept, bump it up to 85%, then 95%, then ultimately 100% of your target goal.
For example, let's say you owe a debt of $2,000. You can afford to pay off $1,000 right now. This means that $1,000 is your target offer. Your first offer should be 65% of your target offer, or $650. If they don't accept, bump it up to 85%, or $850. Then 95%, or $950. Theoretically, you should able to afford all of these amounts since you already determined your target amount.
Hopefully that makes more sense!
I hire an attorney help me settle..he didn't file answer ..he said he didn't have too...debt is 1600.00 they been refusing to accept...last and finally offer was 800.00..lawyer asks me can you offer 900.00..I said no!
It’s a scam. I paid $275. What I get is automated email. They said it will be filed in 3 days but haven’t heard from they for more than 2 week. They have no phone number listed as-well. After I emailed them a couple of times. I keep getting email not delivered. So now I can’t call or email them. I lost my $275. Don’t be like me.
You might want to check your email for updates from us, as the tracking numbers for your documents may have been sent to your spam inbox.