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Settling A Debt Collection Lawsuit

debt collection

Settling a debt collection lawsuit involves negotiating with your creditors to pay an amount less than what you already owe. When a creditor files a lawsuit, you have the opportunity to negotiate a settlement with a debt collection lawyer who is new to the situation. The overall goal of a settlement is to get you out of debt for the least amount of money possible with the least amount of damage to your credit.

What Are My Debt Settlement Options?

Settlement is still available after the start of a collection lawsuit against you. Courts often require that both parties to a case try to reach a settlement agreement. It is common for lawsuits to settle before trial, especially if the amount at issue is not a huge sum. A debt settlement attorney can help you settle your debt and avoid a trial, which is usually ideal.

The following are two types of settlement options:

  • Settle To Pay Less Than the Full Amount: A settlement occurs when you or your lawyer negotiate with the debt collector to reduce your debts so that you pay something but not the entire debt. For instance, you owe $1000 in debt and negotiate to pay off $700 to have the debt forgiven. Note that payment plans are not always possible for debt settlement, so a significant lump sum payment might be required. A settled debt will still report on your credit history and will likely decrease your credit score but not as severely as other options or a complete default judgment.
  • Settle To Pay The Full Amount Over Time: This is a good option if you have the ability to make payments over time and if your creditor is amenable to this solution. The creditor may require access to your bank account so that they can withdraw the payments directly. This option is a possible resolution even after a lawsuit has been filed but has not yet resulted in a judgment against you. This is because the creditor wants to resolve the suit to avoid costly legal fees and costs, as well as the risk that you could file bankruptcy and they could receive nothing.

How Will a Lawyer Help Me Reach a Better Debt Settlement?

There are many reasons why you should hire an attorney to help you get your best settlement option, including the following:

  • Reliable Counsel: A lawyer is a better choice than a debt settlement company, especially after a suit has been filed. This is because a lawyer can help you navigate the court system, file for bankruptcy (if needed), go to court, and stop debt collectors from directly contacting you. Debt settlement companies cannot do any of these things. Your creditors will be more likely to settle when you have a lawyer because your lawyer will make the situation much more difficult for them to easily get the result they want.
  • Review All of Your Legal Options: An attorney will also help you understand all your options in settling a debt collection lawsuit. A free consultation is especially beneficial because it will help you know your options, understand if the benefits of legal help are worth the costs, and give you an unbiased view of your situation.
  • Hold Creditors Accountable: If an attorney believes your creditor has acted illegally, they may take your case to court without charging you because the creditor will be responsible for legal fees if they acted illegally. The possibility of this consequence will significantly enhance the chance of settlement.

Set Up a Consultation with Our Knowledgeable Debt Settlement Attorneys

Every person’s debt situation is different, which is why you should set up a legal consultation to see what is best for you. At Fitzgerald & Campbell, our debt settlement team possesses years of valuable experience in this area and has successfully negotiated debt collection settlements that have saved our clients substantial amounts of money. Debt settlement can be complicated, and there are many frauds out there trying to trick people out of their hard-earned money. If you don’t want to make your situation worse, please reach out to us today so we can discuss the details of your situation.

To learn more about our services, schedule a free case consultation by calling (844) 431-3851 or contact our firm online.

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