How to Settle a Debt in Nebraska: 3 Simple Steps

Debt affects most people. Credit cards, auto loans, and mortgages all create financial obligations.

Sometimes you get trapped in too much debt. Other times, unexpected events prevent regular payments.

When you stop making payments, creditors take notice. They’ll call you and send letters. After enough time passes, they may charge off your account or file a lawsuit.

A debt collection lawsuit can result in a judgment against you. Judgments grant creditors powerful rights. They can garnish your wages or freeze your bank account. Depending on the case, they might even seize your property.

You can usually settle your debt before your court date. Debt settlement helps you avoid a judgment and move on.

If you want to settle your debt in Nebraska, follow these steps.

Follow These 3 Steps to Settle a Debt in Nebraska

You can start the debt settlement process with these three steps:

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

Keep reading to learn more about each step.

1. Respond to a Debt Lawsuit With an Answer

A debt lawsuit begins when you receive a Summons and Complaint. The Summons notifies you of the suit. The Complaint lists the reasons for the lawsuit.

The Complaint will include your failure to repay the debt. It shows the total balance you owe. It also lists any interest or penalties.

Most people don’t realize they must file a legal response. Without a response, you’ll face a default judgment. Your legal response is called an Answer.

An Answer states your defenses against the creditor’s claims. You might argue improper debt validation. You could claim the statute of limitations has passed.

In Nebraska, you have 30 days to respond to a debt lawsuit. Miss the deadline and you’ll likely lose by default judgment.

Default judgments allow creditors to garnish your wages. They can put liens on your property. They can freeze your bank accounts.

Even if you plan to settle before court, file an Answer. An Answer protects you if settlement efforts fail.

Filing an Answer requires a few steps. Our partner Solo can help you draft and file an Answer in all 50 states.

2. Make an Offer to Start the Negotiations Process

Determine how much you can offer in a settlement. Review your savings account and upcoming paychecks.

If you don’t have much cash, consider these options. Find a side job. Sell personal items you no longer need. Seek help from friends and family.

We recommend offering around 60% of the total debt. That amount is significant enough for creditors to consider. It makes settling more attractive than pursuing a lawsuit.

Most creditors will counter your offer with their own. You may go through several negotiation rounds before reaching a deal.

Maintain your composure throughout the process. Don’t accept an offer you can’t fulfill.

When creditors refuse to cooperate, explain your financial circumstances. They may become more understanding. They might accept a lower offer.

If you accept a settlement and fail to meet its terms, consequences follow. Your lawsuit will proceed. You’ll likely face a judgment against you.

Our partner Solo negotiates your debt settlement for you.

3. Get the Settlement Agreement in Writing

Never transfer money before getting the agreement in writing. A written agreement ensures both parties understand the terms.

Your settlement agreement lists the amount you’ll repay. It specifies when payment is due. It explains how you’ll transfer the funds.

Include language that your payment waives the creditor’s right to remaining amounts. Require them to drop the lawsuit against you.

We recommend notarizing the agreement. A notary witnesses your contract. Notarization adds legal credibility to the deal.

Nebraska Debt Settlement Example

Example: Nora receives a summons from Payday Loans 4 Everyone. The lawsuit amount is $1,000. She can’t afford to repay the entire amount before court.

Nora files an Answer to the lawsuit. She then contacts Payday Loans 4 Everyone. To start negotiations, she makes her first offer at 40% ($400).

Payday Loans 4 Everyone counters with $600. Nora accepts the counteroffer. She sets up a debt settlement agreement. Both parties sign before she transfers payment.

Payday Loans 4 Everyone drops the lawsuit. Nora saves hundreds of dollars.

What Are Nebraska’s Debt Collection and Debt Settlement Laws?

Nebraska adheres to the Fair Debt Collections Practices Act (FDCPA). Under the FDCPA, debt collectors cannot take certain actions.

FDCPA Prohibitions

• Calling consumers before 8 a.m. or after 9 p.m.
• Using obscene or threatening language to collect a debt
• Telling the creditor they’ll go to jail for failing to repay
• Contacting a consumer more than seven times over seven days
• Calling the consumer at work after being asked not to

Nebraska enacted its own legislation concerning debt collection practices. NE Code § 45-1047 (2012) prohibits collectors from additional actions.

Nebraska-Specific Prohibitions

• Telling the borrower they’ve committed a crime when they haven’t
• Threatening the consumer with legal action they can’t take
• Soliciting a postdated check with the intention of threatening criminal prosecution
• Falsely representing the amount of the debt due

Nebraska Statute of Limitations on Debt

Nebraska has statute of limitations laws that limit debt collection. Under NE § 25-205, creditors can pursue written debts for five years.

NE § 25-206 notes that oral accounts have a four-year statute of limitations. NE § 25-212 has a four-year statute of limitations on open accounts.

Federal Debt Settlement Regulations

The Federal Trade Commission amended the Telemarketing Sales Rule. The amendment expands debt settlement regulations to all debt relief organizations.

All 50 states, including Nebraska, are governed by the Rule. The Rule applies to debt settlement practices.

Under the new Rule, debt settlement companies cannot:

• Charge upfront fees. Companies cannot collect fees before the debt is settled or resolved.
• Fail to disclose information about services. Companies must disclose costs, timeframes, required savings, potential consequences, customer rights, and important terms.
• Misrepresent their services. No false or unsubstantiated claims can be made.

Which Debt Settlement Company Is the Best?

Several debt settlement companies can help you settle debts. Be warned that agencies often end up being scams. Many charge exorbitant fees that cancel out your savings.

Hundreds of debt relief agencies exist. None of them operate quite like Solo.

Our partner Solo specifically helps individuals facing a debt lawsuit. The tech-based approach sends and receives settlement offers on your behalf.

You don’t pay any upfront fees until the debt is settled. Solo manages your payment and settlement agreement for you.

Solo is more affordable than typical debt settlement companies. Solo takes an active approach to settlement. You don’t wait for creditors or collectors to reach out.

Solo accepts any amount of debt. Traditional debt settlers only take cases involving debts of $15,000 or more. Solo can help you settle a debt of any size.

Other Debt Settlement Companies

Below are other trusted debt settlement companies you might consider:

• Freedom Debt Relief: One of the nation’s largest debt settlement companies. Has helped over 750,000 people resolve outstanding debts. You can bundle multiple debts for settlement. Services range from 15% to 25% of your total debt’s value.
• Accredited Debt Relief: Offers debt settlement services for unsecured debt. Individuals must carry at least $10,000 in debt to qualify. Charges 15% to 25% for services. Programs last between two to four years.
• National Debt Relief: Specializes in unsecured debt like credit cards, medical bills, and personal loans. Has helped over 400,000 people obtain debt relief. Charges fees ranging from 15% to 25%. Programs take two to four years to complete.
• Century Support Services: Popular debt relief company. Since 2012, has helped customers resolve more than $1.7 billion in debt. Charges clients 18% to 25%, depending on debt amount.

What’s the Best Way to Contact a Creditor?

You can contact your creditor via email, phone, or letter. We recommend email since it’s quick and allows written records.

Email lets you consider your responses before replying to the debt collector. You’ll have documentation of all communications.

Some people prefer to speak with creditors directly over the phone. Record the conversation if you decide to call.

Under NE Code § 86-290, recording a conversation with one party’s consent is legal. You’ll be the person consenting to the recording.

Nebraska Debt Settlement FAQs

What percentage of debt should I offer to settle?

The amount you offer depends on what you can afford. The higher your offer, the more likely acceptance becomes.

An offer of at least 60% is what we recommend. If that’s too much, explain your financial circumstances.

Your debt collector may be willing to work with you. You can find a mutually satisfying arrangement.

When does debt become uncollectible in Nebraska?

Your creditor cannot take legal action after the statute of limitations passes. Oral and open accounts have a four-year statute of limitations.

Written accounts have a five-year statute of limitations. Even after the statute passes, creditors can continue to report the account adversely.

Can I settle my debt on my own?

Yes, you can handle your own debt settlement. Research the process to understand how it works.

Save some money toward your settlement. Once you’re ready, contact your creditor to begin the procedure.

How to Get Debt Relief in Nebraska

If you have more questions about debt settlement in Nebraska, we have answers. Read through some of our other guides for assistance:

• How to Get Debt Relief in Nebraska
• Statute of Limitations on Debt Collection in Nebraska
• How to Answer a Summons for Debt Collection in Nebraska
• Nebraska Court Case Search: Find Your Lawsuit

You Can Accomplish Debt Settlement With Some Work

Debt settlement isn’t a fun process. However, once you finish it and satisfy your obligation, you can move on.

You won’t need to worry about further legal actions. You won’t receive calls from debt collectors anymore.

You can accomplish debt settlement with the right approach and tools. Our partner Solo can help you resolve your debts faster.