How to Resolve Your Debt Lawsuit: Expert Q&A Session
Most debt lawsuits settle for 60-74% of the total amount owed. Filing an Answer gives you leverage to negotiate. Collectors prefer settling over expensive court trials, so you have more power than you think.
Answer Your LawsuitGetting sued for debt can feel overwhelming. You have options to fight back.
Our team held a live session answering real questions from people facing debt lawsuits. You’ll learn how to respond, settle, and win your case.
Stop the Default Judgment Clock
You have limited time to respond to your debt lawsuit. File your Answer today and gain the leverage you need to negotiate a better settlement with the collector's attorney.
Respond to Lawsuit NowImportant: The advice here is educational, not legal counsel. Always consult an attorney for your specific situation.
Understanding the Debt Lawsuit Process
Everything starts when you receive a Complaint and Summons in the mail. The Summons notifies you of the lawsuit. The Complaint explains why you’re being sued.
Your next step is filing an Answer document. Our partner Solo helps thousands of people create and file proper responses to debt lawsuits.
You have three service levels available:
- Basic: Generate your Answer document yourself
- Standard: We calculate fees and file for you
- Premium: Attorney review plus faster filing by mail
After filing your Answer, you gain leverage to negotiate a settlement.
Settlement: Your Best Path Forward
Most debt collectors prefer settling over going to court. Trials cost money and take time.
Major collectors like Midland Funding typically collect only two to three times their portfolio investment. They buy debts cheaply but can’t collect on many accounts.
That’s why settlements happen frequently. Even though they bought your debt for pennies on the dollar, they won’t always accept lowball offers.
Current data shows most lawsuit debts settle around 60% of the total amount. Some experienced law firms report 74% settlement rates. Settlement percentages range from 20% to 80% depending on your circumstances.
How to Negotiate Your Settlement
You can settle directly with the collector’s attorney. Find their contact information on your lawsuit paperwork.
Call or email the law firm, not the original creditor. Explain how much you can pay. Be realistic about your financial situation.
Collectors care about your income level. Limited income strengthens your negotiating position. They’ll likely offer a payment plan option.
Pro tip: Start lower than your target amount. Negotiation is positional bargaining. You’ll work your way to a middle ground.
Our partner Solo can send settlement offers to collectors on your behalf. You avoid the pressure of phone negotiations.
Common Questions About Debt Lawsuits
Do Creditors Show Up in Court?
Usually the creditor’s attorney appears, not the company itself. Settlement discussions often happen right at the courthouse.
Judges frequently ask if parties have tried settling. They may send you to negotiate in the hallway before proceeding.
If the collector doesn’t show up, you can file a Motion to Dismiss for lack of prosecution. Sometimes judges throw out these cases automatically.
If you don’t show up, you’ll likely lose by default. Always appear for your court date.
How Much Do Settlements Cost?
Expect to settle for 60% to 74% of the total debt on average. A $10,000 lawsuit might settle for $6,000.
Lump-sum payments often get better discounts. You might negotiate down to 50% by paying everything upfront.
Payment plans offer more flexibility on monthly amounts. You can stretch payments over many months at lower rates.
Settlements typically freeze interest charges. You won’t pay the original credit card APR or post-judgment interest.
When Should I Settle After Filing My Answer?
Make a settlement offer immediately after filing your Answer. You don’t need to wait.
Some people complete both steps back-to-back on the same day. Filing your Answer first gives you negotiating leverage.
Never try settling without filing an Answer first. You have zero leverage otherwise.
What Happens If They Decline My Offer?
The lawsuit continues to the discovery stage. You’ll receive Requests for Admissions and Interrogatories.
Discovery means both sides share evidence and documents. You must respond to these requests by the deadline.
Many people at this stage work with an attorney. Our partner Solo connects you with experienced lawyers who handle all discovery documents and court appearances.
Should I Contact the Creditor or Their Attorney?
Always negotiate with the attorney representing the creditor. They have authority to settle the case.
The original creditor usually can’t make settlement decisions once they’ve filed a lawsuit. Work directly with their legal representation.
Other Defense Options Beyond Settlement
Motion to Compel Arbitration
Many credit card agreements include arbitration clauses. You can force the case into arbitration instead of court.
Arbitration costs money for collectors. They often prefer settling once you file this motion.
Check your original loan agreement for arbitration language. Credit cards frequently include these provisions.
Debt Validation Letters
Before a lawsuit starts, you can send validation requests. Collectors must prove you owe the debt.
Some attorneys debate whether validation helps settlement negotiations. You can still settle after requesting validation.
Validation works best early in collections, before lawsuits get filed.
Motion for Summary Judgment
Collectors sometimes file these motions to win quickly. You must respond by the deadline.
Missing this deadline often means automatic loss. An attorney can help craft your response.
Preparing for Your Court Date
Dress professionally and arrive early. Bring all relevant documents with you.
Gather proof of payment if you already paid the debt. Bring bank statements showing your financial situation.
Your main defense: The collector can’t prove you owe the debt. They must provide evidence.
Watch preparation videos before your hearing. Understanding courtroom procedures reduces anxiety.
Come prepared with a Motion to Dismiss if the collector might not appear.
What 10 Million Americans Face Each Year
About 10 million people get sued for debt annually in America. Another 70 million have debts in collections.
You likely know someone dealing with debt collectors right now. Share resources that helped you.
Collectors spend significant money pursuing lawsuits. Sometimes their legal fees exceed the actual debt amount.
They continue anyway because they handle thousands of cases. A few big wins offset smaller losses.
Lump Sum vs Payment Plans
Lump-sum settlements offer the best discounts. Aim for 50% if you can pay immediately.
Payment plans give you breathing room. Negotiate for smaller monthly amounts you won’t miss.
Never agree to payments you can’t afford. Missing payments can restart the entire lawsuit.
Settlement plans typically include no interest charges. You pay the agreed amount over time.
Fighting Back Against LVNV Funding and Other Collectors
Major collectors like LVNV Funding buy old debts cheaply. They often can’t provide proper documentation.
Demand they prove the debt with original account statements. Many can’t produce required evidence.
Collectors sometimes triple the original amount with fees and interest. These additions often aren’t legally valid.
Challenge every fee and interest charge. Make them justify each additional cost.
Take Action on Your Debt Lawsuit Today
You have power in this process. Filing an Answer stops default judgments. Negotiating settlements saves thousands of dollars.
Start by responding to your lawsuit within the deadline. Every state has different time limits.
Then make a settlement offer based on what you can truly afford. Be honest about your financial situation.
Remember that collectors want to settle. Trials cost them money and time. Use that to your advantage.
Thousands of people successfully defend debt lawsuits every year. You can join them.