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How to Settle Debt With Bill Collectors

George Simons | January 27, 2025

George Simons
Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Are you being sued by a bill collector for an old debt? File an Answer with the court to avoid default judgment and negotiate with the bill collector to settle your debt outside of court. Solo can help.

Debt collectors can be collection agencies or lawyers are hired by banks and credit care companies to take legal action to collect. There are also debt buyer companies that purchase older debts from creditors or other businesses. Their job is to attempt to collect them and get their money back. Bill collectors are also called debt collection agencies, debt collection companies, or debt buyers.

If you’ve been sued by a bill collector, keep reading to learn how to negotiate with debt collectors to settle your debt without stepping foot inside a courthouse.

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Why a bill collector is calling you

  • You have a creditor that believes you are past due on a debt. Creditors often have their own debt collectors, but they can refer or sell your debt to an outside bill collector.
  • To locate someone you know. This is legal as long as they do not reveal they are debt collectors.
  • A debt buyer bought your debt and is attempting to collect on it.

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If you are concerned about a bill collector calling you, you need to learn your rights and how to stop the calls if they become too much. You can also ask them to stop contacting you, but this will not stop them from taking you to court or reporting your debt to the credit bureau. If you do choose to ignore them, you may end up being sued for debt, which can worsen the situation.

If you do not owe the debt you are being contacted about or have already paid it, it is essential to resolve it before it damages your credit.

Respond to a lawsuit promptly

If you’re wondering how to answer a Summons, we can break it down for you.

Often, the number one mistake that borrowers make when being sued for a debt is not responding. There are numerous reasons this happens. Often, it’s because the consumer feels overwhelmed at the thought of a court battle, especially if they lack the resources to hire an attorney. In some cases, they may not have been served correctly and do not realize they’re being sued.

Taking no action is the worst thing you can do if you’re sued for a debt. It enables debt collectors to win a default judgment against you without having to do any work to prove you owe the debt. Once they’ve won a judgment, they can garnish your wages, place liens against your property, or even seize your bank account. The plaintiff can also ask the court to add attorney’s fees, court costs, and interest to the balance.

The notice will typically arrive as a Summons and Complaint. The Complaint will list the allegations against you. You will need to respond with an Answer that addresses each allegation. You can:

  • Admit
  • Deny
  • Deny for lack of knowledge

Filing an Answer is only the first step in the lawsuit process. Until you’ve reached a settlement agreement or the case is dismissed, you have to continue to keep up with the case's progress through the court system. Attend scheduled hearings, respond to other documents that the collector files, and be proactive and involved in the case proceedings.

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Sending an Answer

Once the plaintiff (the bill collector) files a lawsuit, the matter will be put before the court. This means you can no longer respond through the phone or even a letter. You will need to respond specifically with a legal document called an Answer. Things to remember when sending your Answer (response):

  • Always force the bill collector to prove you owe the debt
  • Never admit liability for the debt
  • File the Answer with the Clerk of Court
  • Ask for a stamped copy of the Answer from the Clerk of Court
  • Send the stamped copy as certified mail to the plaintiff
  • Respond within the amount of time on the summons (typically 20 to 30 days)

You must respond in the allotted amount of time on the response because if you do not, it is the same as not responding at all. Then, an automatic judgment will be placed against you. Once a judgment is entered, you may no longer be able to fight the debt.

Challenging the bill collector

One of the best ways to avoid a debt lawsuit is to challenge their right to sue. Most often, the debt has been sold many times at this point, and the entity pursuing you will be required to show proof that they legitimately own the debt and have a right to sue.

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Legal proof that you owe the debt

  • The credit agreement that you signed
  • Documentation of the chain of custody of all paperwork
  • That you are responsible for the debt
  • The bill collector has the right to sue you
  • You owe a specified amount of money

Although it might seem like this is easy information to obtain, that’s not always the case. These accounts often change hands multiple times before they reach the status of a lawsuit. It’s not uncommon for the paper trail to be lost, which is why it’s essential that you ask for this information. If the bill collector fails to provide the information, it can result in a dismissal of the lawsuit or an agreement for a much lower settlement amount.

Don't let debt collectors push you around. Beat them in court with SoloSuit.

The best affirmative defense

Affirmative defenses are legal arguments that completely protect you from being sued for a debt. One of the most effective affirmative defenses is the statute of limitations. The law determines how long creditors have to file a lawsuit against you. While the specific rules can vary depending on the state and the type of debt, the typical time frame ranges from four to six years.

The clock on the statute of limitations starts from the last day there was any activity on the account. Activity can include paying or using the account, such as the last time you charged something to a credit card.

Restarting the statute of limitations

It is essential not to make payments on accounts involved in a lawsuit. This is because you will restart the statute of limitations period if you make any type of payment or activity. Some agencies work to revive what is called “zombie debts” to extend the timeline and file a suit against you.

How to settle debt with bill collectors

If you’ve verified that the debt belongs to you, debt settlement may be the best choice to resolve the debt and move on with your life. The process is simple, so just follow the steps below.

  1. Review your personal finances and determine how much you can afford to pay. While some debt collectors will work with you on installment payments, you will save the most money by offering a lump sum settlement amount.
  2. Open negotiations by sending a letter or email outlining how much you’re offering and when you can make the payment. Consider offering somewhat less than the maximum you can afford so that you have room for negotiations.
  3. Get a signed settlement agreement once you and the debt collector have decided on an amount.
  4. Pay the settlement amount within the agreed-on time frame.

If a bill collector has sued you, make sure that you receive notice that the case has been dropped or dismissed after the settlement.

SoloSettle can make the debt settlement process easy. You can make an offer and negotiate with bill collectors online, keeping all correspondences on the web app, and safely making the payment to the bill collector through the app to keep your financial information private and secure.

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

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Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

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Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

Other wage garnishment resources

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

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Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

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Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt.

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Struggling with student debt? SoloSuit’s got you covered. Below are resources on handling student loan debt.

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

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