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How to Settle a Debt in Alaska

Sarah Edwards | December 06, 2022

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

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.

When you settle your debt ^^

Summary: If you’re trying to settle your debts and get a clean financial slate in Alaska, SoloSuit can help. We’ve put together everything you need to know about how to settle a debt, even if you’re facing a lawsuit from your creditor or debt collector.

Knowing that you owe money to a debt collector or creditor can be immensely frustrating, especially if you cannot fully repay the debt. You may struggle to make payments for months or years only to see little difference in the outstanding balance.

Fortunately, you can settle your debt if you are struggling to make ends meet. Many creditors and debt collectors are willing to settle for a portion of the original debt amount, especially if you explain your financial circumstances and obstacles.

In fact, the average consumer is able to reach a debt settlement at 50% of the debt when working with a debt settlement company. While it isn’t always easy to reach this great of a settlement, there is still a great chance you can settle and save.

In this article, we’ll walk through how to settle a debt in Alaska and how to respond to a debt lawsuit there.

Follow these 3 steps to settle your debt in Alaska

If you’re facing a debt collection lawsuit in Alaska, there are three steps you’ll need to take to avoid court and settle your debt:

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

Below, we take a closer look at each of these steps. Alternatively, check out this video to learn more:

1. Respond to your debt lawsuit with an Answer

If you’re being sued for debt, you’ll receive a Summons and a Complaint. These are court documents that initiate a debt lawsuit. The Summons notifies you of the case, while the Complaint explains the reasons behind the suit: the amount you supposedly owe, who owns the debt, and any interest or fees associated with your case. You should review the Complaint carefully and draft an Answer to it.

An Answer responds directly to the Complaint. You’ll include any reasons you have for failing to repay the debt. If you have specific concerns, like the amount of the debt being incorrect, you should include them.

Even though you intend to settle the matter before your court date, an Answer will protect you from a default judgment in case your efforts fail. The judge will review the Answer and listen to your argument when you appear in court.

Learn more about how to respond to a debt collection lawsuit in Alaska here.

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2. Make an offer to start the debt settlement negotiations

Your next step is to figure out what you can afford to pay in order to settle.

Check your savings and determine how much money you can come up with before your court date. If you don’t have much money to give in a settlement, see if family or friends can help.

You should also investigate past settlements that your creditor or debt collector has reached with other consumers. This will give you an idea of the percentage that they are most likely willing to accept.

Ideally, you’ll want to start your offer for debt settlement with at least 60% of the total value of the debt. For example, if you owe $3,000, you’d offer $1,800. If you can’t afford 60%, start negotiations with what you have available and explain any factors that are dragging you down financially.

Your creditor will consider your offer and decide whether to accept or provide a counteroffer. If the counteroffer is more than you can afford, let them know. You may be able to come up with a creative solution, like stretching your payments out over several months.

Be prepared to negotiate with the debt collector, but don’t accept an offer you know you won’t be able to pay. If you fail to adhere to the terms, the collector will use your lack of compliance as further evidence of your unwillingness to repay the debt, and the judge will likely grant the judgment against you.

SoloSettle takes care of the debt settlement negotiation process for you.

3. Get your debt settlement agreement in writing

Don’t repay the debt collector until you have a debt settlement agreement in writing.

Some debt collectors restart collection activity even after receiving a settlement. A written agreement gives you something to refer to if the collector comes after you again.

Check out this debt settlement agreement example to learn more about what to potentially include in yours.

You’ll notice that the sample agreement requires you and the opposing party to sign in the presence of a notary. Getting the agreement notarized adds additional credibility to the contract and protects you from further legal activity as long as you abide by its terms.

Now, let’s look at an example.

Example: Jane was sued by LVNV Funding for an old credit card debt of $2,000. She knew she could afford to pay off $1,500 in a lump-sum payment, but she wasn’t sure how to go about it. After responding to the lawsuit with SoloSuit’s Answer form, Jane used SoloSettle to send an offer of $1,000 to LVNV Funding. After a few rounds of negotiations, they reached a settlement agreement at $1,500 (only 75% of the original debt amount).


SoloSettle manages your debt settlement agreement for you.

What are Alaska’s debt collection and debt settlement laws?

The Federal Trade Commission has recently amended the Telemarketing Sales Rule to expand debt settlement regulations to all debt relief organizations and companies. All 50 states, including Alaska, are governed by this Rule as it relates to debt settlement practice.

Under the new Rule, any company that provides debt relief services, namely debt settlement companies, cannot:

  • Charge upfront fees. Debt settlement companies cannot collect any fees from a consumer before the debt has been effectively settled or otherwise resolved.
  • Fail to disclose certain information about its services before a consumer enrolls in the program. This includes how much the service costs, how long it takes to see results, how much money must be saved before a settlement offer is made, consequences that may occur if the consumer fails to make payments on time, customer’s rights, and other important terms.
  • Misrepresent their services. No false or unsubstantiated claims can be made regarding a debt settlement company’s services.

Alaska also recognizes the Fair Debt Collection Practices Act (FDCPA), the federal regulation that governs the collection of debts. Under the FDCPA, debt collectors must follow specific rules. For example, debt collectors are not allowed to:

  • Call consumers before 8 a.m. or after 9 p.m.
  • Harass consumers by calling them repeatedly or allowing the phone to ring off the hook.
  • Continue to contact consumers after receiving a written request to stop.
  • Use threatening or profane language to convince consumers to repay the debt.
  • Misrepresent who they are when trying to collect a debt.

Alaska has additional laws that protect consumers from debt collectors. The Alaska Unfair Trade Practices and Consumer Protection Act AS 45.50.471 - AS 45.50.561 provides additional restrictions. In particular, debt collectors cannot:

  • State that failure to repay the debt will result in a criminal charge or jail time.
  • Threaten to garnish your wages without a valid judgment to do so.
  • Say that their letters are legal court documents when they’re not.
  • Tell you that they’ve taken legal action against you when they haven’t.
  • Apply a payment for a debt to a disputed account.

Under Alaska law §09.10.053, all medical debt, credit card debt, auto loans, and mortgages have a three-year statute of limitations. If your debt passes the statute of limitations, your creditor cannot pursue legal action to recover the money.

However, they can continue to report your account to the credit reporting bureaus, and they may continue to call you or send you collections notices.

What’s the best debt settlement company?

You be the judge of that.

Many people prefer SoloSettle over traditional debt settlement companies. Here’s why:

  • SoloSettle accepts customers with debts of any size. Most debt settlement companies require a debt of at least $15K or more.
  • SoloSettle takes an active approach to help you settle your debt. Whereas many debt settlement companies wait for the creditor or collector to send a settlement offer, SoloSettle proactively starts the negotiations for you.
  • SoloSettle can help you settle your debt and simultaneously defend yourself in a legal dispute with SoloSuit’s services. Most debt settlement companies don’t provide legal defense; if you’re sued for a debt you are on your own.
  • SoloSettle is offered by SoloSuit, a trusted brand and a legitimate company. Many traditional debt settlement companies are actual scams.

There are lots of debt settlement companies that can help you negotiate a settlement with your creditors. However, beware that some are scammers trying to steal your money. Here are a few reliable debt settlement companies for you to consider:

What are the best ways to start the negotiation process with a debt collector?

If you’re ready to start negotiating a debt settlement with your creditor, you can begin the process via email, mail, or a phone call. We recommend email since it’s quick and ensures you have a written negotiation record. Mail is slow, so you should avoid it if you’re trying to negotiate a settlement before your court date.

You can also consider handling the negotiation process over the phone. However, if you do so, we recommend that you record the call so that the debt collector can’t arbitrarily change the terms of the agreement or say there was never a settlement.

Alaska Stat § 42.20.310 allows people in Alaska to record conversations as long as one party (in this case, you) consents to the recording. This means that you do not have to ask the debt collector or creditor for permission to record a phone call. Only you need to consent.

FAQs about debt settlement in Alaska

People typically have lots of questions about the debt settlement process. Here are a few that we often hear.

Q. What percent should I offer to settle a debt?

We advise that you start with an offer of at least 60% of the debt’s value. However, if you don’t have that amount available, you can offer what you can afford to pay. Be aware that your debt collector will likely present you with a counteroffer.

Q. Is it better to settle a debt or pay it off?

It’s better to pay off a debt in its entirety. Paying off your debt looks better on your credit report, even if you didn’t repay according to your payment schedule. However, if you can’t afford to pay off a debt, a settlement can stave off a potential debt lawsuit and wipe your account clean.

Q. How much should I offer to settle an old debt?

If your debt is very old, the creditor knows they’re unlikely to recover all of it. You may be able to offer as little as 30% of the debt to clear up your account in a settlement. Even though the debt may be past the statute of limitations, settling it will stop future collection calls and letters.

How to get debt relief in Alaska

We have several other guides concerning debt relief in Alaska. Check out the following for more information:

Settling a debt in Alaska is possible with SoloSettle

While you may think that settling a debt before a lawsuit is a fool’s errand, it’s not. If you use the tactics in this guide, you can settle your debt in Alaska before your court date for less than what you owe.

What is Solo?

Solo makes it easy to resolve debt with debt collectors.

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.

SoloSettle can help you contact your debt collector or creditor and negotiate the debt to settle for less, all online. It simplifies and streamlines the process to settling your debt.

No matter where you find yourself in the debt collection process, Solo is here to help you resolve your debt.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

Resolve your debt with your creditor

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.

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

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.

Other debt settlement resources

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.

How to repair and improve your credit score

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.

How to resolve student loan debt

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

How-to debt guides

Learn more with these additional debt resources

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



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