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I just received a summons from a law firm saying that they are representing a debt collector and that they are suing me for a $6K debt that I defaulted on due to a job loss. I have friends and family that will loan me about $3K to try and pay this off. I want to settle this and be done with it so my question is, should I try to negotiate a settlement directly with the debt company or try and work with the law firm that represents the debt collector? What's the best way to negotiate a settlement? Also, what should I ask for to make sure the settlement is legitamate? Apologies if there are similiar questions or responses that have answered this question. Thanks in advance!
Location: 23.7 million to 162 million miles North of Venus
23,643 posts, read 12,561,414 times
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Everyone's situation is a little different so it never hurts to ask your questions. You posted a pretty generic question so the best I can do is give you some generic tips.
1. Call the court clerk to make sure there is a suit filed in your name.
2. Check the SOL for your state and see if the debt is still within SOL or is past SOL.
3. Google your states name along with the term Rules of Civil Procedures, and read.
4. Answer the summons, if it is real. Some states have simple forms that you can fill out to answer the summons, check with the court clerk to see if your state offers that. If not then you might do some research on the web for guides in answering a suit or go to the library and look for the NOLO Press books for help (keep in mind that using the web or the books are only for examples, you need to taylor it to fit your situation and your states laws). If the debt is past SOL then include an affirmative defense of SOL in with your answer. Use the RCP when writing up your answer.
5. If the debt is past SOL then let them continue to take you to court. Aslongasyouanswerthesummons, claimanaffirmativedefenseofSOLandyoushowupforthehearing then chances may be good that the suit would be dismissed since it is a time barred debt.
6. If the debt is still within SOL then, after you file your answer with the court, send a payment agreement to the collector, and their lawyer. You can probably Google debt settlement letters and use them as a guide in writing up your payment agreement letter.
7. Do not sign the letter, only type your name or print your initials. Send the letter by certified mail return receipt. (keep a copy of the letter and keep the returned signed green card to take to court with you)
8. If you come to an agreement, and you have it in writing, then get a money order, cashiers check (not a personal check and not cash) and fill it out. Make copies of that check. Then send them the check.
9. Take copies of the letters, the agreement, the check, etc and go to the court clerk and request that those copies are placed in your file. (don't trust the collector or their lawyer to do it, they may say they will but they will probably won't)
10. Even if you make the (partial) payment, as payment in full, you still need to show up for the hearing. Even if the collector or their lawyer says you don't need to show up, you do. If you fail to show up they will probably go ahead and try to get a default judgment against you, which would mean you would owe the full amount due plus court costs. Never trust a collector or their lawyer.
Hopefully someone else will post tips, or comments, that I may have overlooked.
Thanks so much for the reponse! It looks like the debt is still within SOL, and the court clerk said that the response needs to be sent directly to the debt collector and their attorney and not the court? Any advice on how to respond to the summons if the debt is still within the SOL? Again, any advice will help and thanks in advance.
Location: 23.7 million to 162 million miles North of Venus
23,643 posts, read 12,561,414 times
Reputation: 10501
Quote:
Originally Posted by honestdebtor
Thanks so much for the reponse! It looks like the debt is still within SOL, and the court clerk said that the response needs to be sent directly to the debt collector and their attorney and not the court? Any advice on how to respond to the summons if the debt is still within the SOL? Again, any advice will help and thanks in advance.
The court clerk is wrong!! You must file your answer with the court and send a copy to the collectors lawyer. If you fail to file the answer with either, or both, of them you will lose from the start.
You need to read your states Rules of Civil Procedure (RCP)!!
You say that it looks like the debt is still within SOL. Have you checked the correct state SOL for the type of debt it is, whether it falls under Open, Written or UCC? You know when your first major default, or, the last payment or charge happened (which SOL start date depends on your state)? If you've moved from one state to another and the state you moved from has a shorter SOL have you checked to see if the state you moved to has a borrowing statute? Even the OC may be a factor in the SOL, for example with a Cap One debt you may be able to use Virginia SOL instead of your states if the VA SOL is shorter than your states. Also, if the debt is near being SOL then the affirmative defense should still be used (make them prove that it is still within SOL)
As for answering, if the personal information on the summons and complaint is completelyaccurate then you admit to that. As for the rest then since you don't know 100% that the amount is correct, that the collector has the right to file the suit, that it was even your account, etc., etc., etc., then you would deny because you have insufficient information and knowledge of the truth and accuracy of what you are being sued for. (keep in mind that this is only a generalization!! You need to read your RCP, do your research and read how to answer a lawsuit from online sources and in the NOLO Press books, etc .. or, discuss it with your own lawyer).
You also should check to see if your state requires collectors to be licensed and/or bonded, then check to see if that collector is. If they aren't then that fact should be included in your answer.
If they have nothing to back up the suit but an affidavit of debt signed by an affiant from their own office, not from the OC, then you need to try to strike that affidavit.
I would first contact the debt collector and see if they are willing to offer a settlement for the debt. Oftentimes they will agree to a reduced payment to settle the debt.
Whether the debt collector will agree to a settlement or not, go to court and present your case. If you present the case that you can partially pay the debt and have a good likelihood of being able to pay the remainder in the future, a judge can force the debt collector to accept a payment arrangement or accept delayed payment.
You have been given some great advise. The one thing that wasn't mentioned with regards to settlements. Any amount over $600 that is "written off" due to a settlement is suppose to be reported to the IRS it is considered "income" and this will result in a 1099 c that you will have to claim on your taxes. This could result in extra taxes owed.
This is a sore spot for us. When my wife lost her job, the first thing I did was contact the creditors we could not afford to pay and asked them if they can work with me until things improve. They all said they can't do anything until it goes into collections. I've learned those creditors have changed their policy to work with the customer. My wife is now on disability,...still not as much as she was making when she was working full time. My child support is over and my car is paid off. We now have another car payment since a driver ran a stop sign and totalled my wife's car which was running good and paid off. We contacted the smallest debt we owe and made an agreement. Within two months our debt was paid out. We then contacted the next largest creditor and in another four months that one will be paid out. I hope the other two will be patient because they will get their money. February 2011 I can borrow off my 401 to pay out in full whatever is left on my debts. Will probably try to get with some credit counselor for help after new years because I don't think they'll wait much longer. Got a wife on disability with lots of medical bills and her 84 year old father living with us.
Please go to FTC.gov and search Fair Debt Collections Practices Act. Read the abuses Debt Collectors - Collection Agencies use. If you have any of these that this particular Collection Agency did, then you can file a Cross - Counter Claim in your Answer to the Complaint Summons,
at $1,000.00 per violation.
One of my favorites is the follow up validation, within 5 days of initial contact; which is usually by phone. I've never seen this one done by any collection agency.
Collection Agencies often call on weekends, and holidays - this illegal. Add another $1,000.00 for each violation you can document via caller ID or ????
If you cross claim and counter sue, the collection agency has more to lose on a lawsuit than just not receiving payment. Their stakes take on a different aspect, if they find they could have to pay you!
I was sued from a Collection Agency Attorney for $1,000.00; but Cross Claimed & Counter Sued for $24,000.00. The other Attorney sent us a letter asking us to settle with Dismissal With Prejudice by both parties dropping their lawsuit. We did a Stipulation and Agreement which ALL parties had to sign to be valid. Filed the Stipulation & Agreement documents in Court as well as serving the Attorney, and also filed an Order for the Judge to sign. A done deal!
If you received a summons, then you would have received it from the court and not from the so-called attorneys "representing" the debt collector. Is there a case number from the court, not from the collection agency? Does the court have a record of the suit? If so, then you need a lawyer. If the court doesn't know about it, then this letter is just a way to try to scare you. The summons and complaint are issued by the court, not by an attorney's office.
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