How to Settle a Debt in New Hampshire: 3 Simple Steps

You’ve stopped making payments on a debt. Your creditors have noticed. You’re getting calls, letters, and emails demanding payment.

If you don’t respond, your creditor may sell your account to a collection agency. Worse yet, they could sue you in court.

A debt lawsuit gives your creditor the chance to obtain a judgment against you. A judgment allows them to garnish your wages or freeze your bank account. For secured debts like mortgages or auto loans, they can seize your property.

You need to avoid a judgment at all costs. You can do this by settling your debt before your court date.

Here’s how to settle a debt in New Hampshire and stay out of court.

Debt Settlement Takes 3 Steps

You’ve been sued for a debt in New Hampshire. It’s not too late to settle. You can reach out to negotiate at any stage of the lawsuit process.

Follow these three steps to settle your New Hampshire debt:

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

Below, we’ll explore each step in detail.

Step 1: Respond to the Debt Lawsuit With an Answer

Creditors and debt collectors start the legal process by filing a Complaint with your local New Hampshire court. The Complaint lists all claims against you, including missed payments, interest, and court fees.

Most people don’t realize they must respond to defend themselves. The proper legal response is called an Answer.

In New Hampshire, you have 30 days to respond to your debt lawsuit. If you don’t respond before the deadline, you’ll lose automatically. The court will issue a default judgment against you.

In your Answer, you’ll list your defenses to the lawsuit. Several defenses may apply to your case. They might include insufficient debt validation or an expired statute of limitations.

Our partner Solo can help you prepare and file a proper Answer.

You might wonder why you need an Answer if you plan to settle. An Answer prevents a default judgment if your settlement efforts fail. The judge must review your Answer and supporting documentation before making a decision.

Step 2: Make an Offer to Start Negotiations

Evaluate your financial situation to determine how much you can offer. Check your savings and calculate money from upcoming paychecks. If you’re short on cash, ask friends or family for help. Consider selling items you don’t need.

Use this formula to determine your settlement amount:

Amount available to settle = (monthly income – monthly costs) + savings

We recommend starting with at least 60% of your total debt. That amount is enough to make your creditor consider settlement. They’ll weigh a lump-sum payment against the cost of a lawsuit.

Next, research how much your creditor will likely accept. Debts settle within a broad range of amounts. They can settle anywhere from 1% to over 100% of the total debt.

According to the American Fair Credit Council’s Regan Report, consumers reach an average settlement of 50% when working with debt settlement companies.

A 50% settlement isn’t easy to achieve. We don’t see it often. An 80% settlement is more realistic in most cases. Most creditors and debt collectors accept that amount. Usually, debts settle somewhere within that range. Around 60% is pretty common.

Creditors aren’t trying to make your life miserable. They don’t like appearing in court any more than you do. They simply want to collect the money due to them. They understand that complete collection isn’t always possible. Many would rather cut their losses than go through a time-consuming legal process.

Our partner Solo handles the negotiation process for you.

Step 3: Get the Settlement Agreement in Writing

Once you have a deal with the creditor or collector, get it in writing. A written agreement ensures both parties understand the terms.

Your settlement agreement should specify the amount you’ll repay, a due date, and a payment method. It should also release you from further claims on the debt. Your creditor agrees to drop the lawsuit and accepts your payment as fulfilling your obligation.

We recommend including a space for a notary to sign. A notary witnesses the agreement and adds legal credibility.

Here’s what a proper debt settlement agreement should look like.

Example: How Nora Settled Her Debt

Nora is being sued by LVNV Funding for an old credit card debt of $5,000. She responds to the lawsuit before New Hampshire’s 30-day deadline. That gives her time to work out a settlement plan.

Nora examines her financial situation and decides she has enough to pay 60% right now, or $3,000. She contacts LVNV Funding to send her initial settlement offer. She starts low, offering $2,000 at 40% of the original amount.

After a few rounds of negotiations, LVNV Funding settles at 55% of the debt, or $2,750. They dismiss the case after receiving Nora’s payment. Nora saves thousands, avoids going to court, and gets a financial reset.

New Hampshire Debt Collection and Settlement Laws

New Hampshire follows the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits specific actions against consumers. Barred practices include:

• Calling a debtor before 8 a.m. or after 9 p.m.
• Threatening prison time for unpaid debts
• Using fake legal documents when communicating with consumers
• Calling a debtor more than seven times in one week
• Publishing a consumer’s debt on social media or newspapers
• Contacting a debtor at work after being asked to stop
• Harassing a consumer’s employer to reach the employee

Under NH Rev Stat § 508:4, contracts and open accounts have a statute of limitations of three years. NH Rev Stat § 382-A:9-109 provides that notes or negotiable instruments have a statute of limitations of six years.

Best Ways to Contact a Creditor

You can contact your creditor via email, phone, or letter.

We recommend email as the best method. Email is quick, and you’ll usually reach a resolution within a day or two. You’ll have a written record of the conversation. That’s helpful when preparing your settlement agreement.

Some people prefer speaking directly with their creditors. A phone conversation works better if you don’t have much time before your court date. It’s also useful if you have extenuating financial circumstances to explain.

If you call your creditor, record the conversation. Under NH Rev Stat § 570-A:2, both parties must consent to record the call. You must ask your creditor for permission before starting your recording.

What Percentage Should You Offer to Settle Debt?

Offer as much as possible to settle a debt. Your creditor is more likely to accept higher offers, such as 60% or more.

If that’s too much money, you can offer less and explain your financial circumstances. Sometimes creditors accept a lesser offer if they understand your difficulties.

Start with what you can afford. Be prepared to negotiate. Most creditors would rather settle than go to court.

How Long Can Creditors Pursue a Debt in New Hampshire?

Most debts fall under the three-year statute of limitations in New Hampshire. Notes and convertible instruments have a six-year statute of limitations.

Once your debt passes the appropriate time frame, creditors can no longer sue you. They can still try to collect, but they can’t take legal action.

If your debt is past the statute of limitations, that’s a strong defense. Include it in your Answer to the lawsuit.

Can You Handle Your Own Debt Settlement?

You can handle your debt settlement with the right tools and resources. Save your money toward your settlement and learn how the process works.

Before sending any money to your creditor, get a written agreement. Never make a payment without documentation.

Our partner Solo provides tools to help you negotiate, document, and complete your settlement safely.

Additional Resources for New Hampshire Debt Relief

If you’d like to learn more about debt relief options in New Hampshire, check out these helpful articles:

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

Debt Settlement in New Hampshire Is Possible

No one wants to face a potential judgment for the debts they owe. Debt settlement can help you avoid a judgment and recover your financial health.

Review our steps to debt settlement. Make sure to get your agreement in writing before sending your money.

Remember these key points: Respond within 30 days. Start negotiations early. Always get documentation before paying.

You have options. You don’t have to face this alone.