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How to Settle a Debt If You Get Sued
In most cases, you can settle a debt if you get sued. But you must go about it in the right way.
You may have legitimate defenses, in which case you should strenuously exert them. If you do not dispute that you owe the debt, however, then you should attempt to settle the debt. Debt settlement almost always saves time and money.
Watch your timeline
Never simply accept a default judgment. If you do not timely respond to a complaint or warrant in debt, the court will grant judgment for the plaintiff. The creditor will then attempt to use that judgment to garnish wages or seize bank accounts. At that point, your only options are to pay the debt in full or file bankruptcy.
Responding to the complaint by filing an Answer is your better move. Timelines in the D.C. area are short.
In Washington, D.C. you must file your Answer and serve the plaintiff within 20 days. In Virginia, you have just 21 days to file and serve an Answer. In Maryland, you must file either an Answer or a notice of intention to defend within 15 days after service of the complaint. Out-of-state defendants in Maryland lawsuits get 30 days to respond.
Verify the debt
Once your Answer has been filed and you have served the Plaintiff, verify the debt. Search your personal records and/or credit report to verify whether you actually owe the creditor. Then cross-check your records against the complaint or warrant. If you are unable to locate the debt amongst your records, reach out to opposing counsel and request verification of the debt. If the lawsuit is based on mistaken identity, then resolution should be quick.
Some creditors ignore inquiries until after the initial hearing. These creditors hope that you will not show up and that they will be granted a default against you. You have the legal right to request that the creditor validate their alleged debt. Creditors, as plaintiffs, must legally prove that a debt is indeed your debt. But they are required to do so only within the parameters of the court’s civil procedures and local rules.
Assess your chances
Not all creditors are the same. Some act in good faith, while others will use every advantage they can to extract from you as much as they can. Being right isn’t enough. You must be able to prove that you are right.
Not all defendants are the same, either. If the creditor believes you have the resources to pay the debt in full, in a lump sum, then negotiations with the creditor may prove difficult. Oftentimes creditors do not file lawsuits against defendants they assess as not having the ability to pay.
You must assess your chances not only of prevailing at trial, but of succeeding in negotiations. Knowing which creditors are more likely to settle is helpful. Knowing how to represent your overall financial picture in the most accurate way will also go a long way toward obtaining favorable settlement terms.
Hire an experienced attorney to settle a debt
Your chances of successfully settling a debt improve immensely if you hire an attorney to represent you. Using the court’s procedural rules to your advantage, we may be able to negotiate an affordable installment payment schedule with your debt collector. And we can likely reduce the amount you owe to a percentage. Hiring an attorney to settle a debt almost always saves you time and money. If you get sued on a debt in the D.C. area, call Lee Legal at (202) 448-5136.
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