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How to Resolve a Lawsuit From a Debt Collector

George Simons | January 25, 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: If a debt collector has sued you for a past debt, you're not alone. You can resolve the lawsuit without going to court through debt settlement. To settle the debt, determine how much you can afford to pay, make an offer, negotiate, get the agreement in writing, and make your payment on time. Solo can help you streamline the settlement process.

Millions of Americans face debt collection lawsuits every year. Most find receiving a court Summons as nerve-wracking as you do. Fortunately, there’s help. You could hire a high-priced attorney, and that might serve you well. However, most people in this situation cannot afford attorney fees. Sometimes, the cost of retaining a lawyer is more than the debt owed. What other options do you have?

Ignoring the lawsuit is not an option. The debt does not go away because you trashed the court papers. Additionally, if you wait too long to file your Answer, you risk a default judgment with its many unpleasant consequences.

In many cases, the best option is to represent yourself. The process requires time and work, but it can yield good results. It starts with filing your response with the court and the debt collector’s attorney. Solo can help you do so online. Let’s review the process. We will also discuss how you can get the collector to settle out of court.

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The lawsuit process begins with a Summons and Complaint.

You know you have a lawsuit when the debt collector serves you the court Summons and Complaint. The Summons is an official notification that the creditor has filed a lawsuit, and the Complaint outlines all the specific allegations against you, including the amount you owe and other important information about the debt. After you get past the shock of being served a Summons and Complaint, it is time to act because the clock is ticking. Solo can help.

This flowchart further outlines the debt lawsuit process and the possible routes it can take:

Prepare your Answer document.

As mentioned, ignoring the court Summons is a bad idea. A default judgment can result in wage garnishments and property liens. You can prevent this by preparing and filing your Answer document in time. Read the document carefully before you begin writing.

Take the following steps to prepare the Answer document:

Step 1: Respond to each claim

The document lists the debt collector's claims against you. Your responsibility is to say whether the allegations are true or not. The allegations have three response options. You can deny a claim if it is not valid, agree to it if it is correct, or deny it for lack of knowledge if you do not fully understand what the plaintiff means.

Step 2: Assert your affirmative defenses

After responding to the Complaint, it is time to defend yourself. This process starts by stating why the debt collector should not be suing you. The following are examples of affirmative defenses:

  • You do not owe the debt
  • You already settled the account
  • The statute of limitations has passed

Responding to the Summons is independent of whether you owe the debt. You should answer the complaints first and then contact the debt collector about the details. While filing an Answer in a timely manner is crucial, it’s not your only responsibility during a lawsuit. It’s up to you to keep track of the court case, respond to any requests made by the court, and show up for hearings until a settlement agreement is reached and the lawsuit is formally dismissed.

This video describes six easy tips for drafting an Answer:

File the Answer with the court.

You must submit your Answer to the Summons on time. Depending on the state, you have anywhere from 14 to 30 days to file your Answer with the proper affirmative defenses. Here is what to do.

  • Find the correct court to file the papers
  • Keep time
  • Serve the plaintiff’s attorney
  • Keep copies for your records
  • Attend court hearings

You can use SoloSuit’s Answer to create your document quickly. When you are done, we will have an attorney review it and file it for you. Our services save time by ensuring your answer is legally admissible and we filed in the correct court.

Settle the debt with the debt collector out of court

After filing the Answer, you can negotiate a settlement with the debt collector. Debt settlement is when you settle an outstanding debt obligation for less than the full amount owed. The following steps outline the debt settlement process.

  1. Assess your financial situation. The process of debt settlement starts with an assessment of your current finances to determine how much you can afford to pay to settle the debt. Consider your income, expenses, available savings, and debt amount. Determine how much you can afford to offer as a lump-sum settlement.
  2. Send an official settlement offer. After calculating how much you can afford, approach the debt collector and request them to settle. You should prepare a letter expressing your request, your financial situation, and what percentage of the debt you can pay to close the account. The debt collector may accept your offer or make a counteroffer. Be careful that you only agree to an amount you can afford because not paying the settlement amount can have serious repercussions.
  3. Request a settlement agreement in writing. A written, signed settlement agreement outlines the terms you and the debt collector have agreed on. It should also contain language that states that the remainder of the debt will be forgiven. Keep this for your records as it’s the best proof you have that the debt was settled.
  4. Make your payment on time. Be sure to pay the entire settlement amount in a timely manner. Debt collectors are more likely to settle for less of the debt if the offer is for a lump-sum payment. If you work on an installment plan, they risk having to start over if you default on the debt.

Watch the video below for tips on how to settle debt.

Debt collection lawsuits can be intimidating, but they do not have to overwhelm you. As we have seen, debt collectors may be willing to settle even after they have initiated a lawsuit. The most crucial step in a lawsuit is to file the response in time. Afterward, negotiate with the debt collector for an out-of-court solution using SoloSettle.

Solo wants to help you regain your financial health. Visit our debt collection blog to learn how to resolve debt with a specific debt collector. You will find their contact information and learn how to engage them to resolve debt collection issues.

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