Advice About a Civil Suit on an Old Credit Card Debt

Is it possible to settle out of court for a civil suit on an old credit card debt?

I have a civil suit for old credit card debt and I would like to settle out of court with a payment plan. Is this a possible option?

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Bill's Answer
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Bills.com Team
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The simple answer to your question is yes, it may be possible to negotiate a repayment arrangement with this creditor out of court to prevent this lawsuit from proceeding any further.

First, you should carefully review your finances to determine what you can afford to pay each month to resolve this debt. Be honest with yourself about your financial situation and you ability to pay; if you overextend yourself, then you will likely end up defaulting on your new payment plan, which could make resolving the account even more difficult in the future. Once you have an idea of what you can afford, you need to contact the creditor’s attorney to try to negotiate a workable repayment plan. For example, the creditor may be willing to accept a percentage of the amount owed, say 80%, and allow you to repay that amount over the course of several years.

Some creditors are not willing to reduce the balance owed, but will still agree to a payment arrangement on the full balance to resolve the debt. It is relatively uncommon to find a creditor who simply refuses to negotiate with consumers, so I would be surprised if the creditor was not willing to offer you some type of repayment plan.

Generally speaking, once a lawsuit has been filed to collect on a delinquent account, the creditor will ask the consumer to sign a stipulated judgment, which states that the creditor will take a judgment against the consumer, but that it will not try to enforce the judgment as long as all agreed upon payments are made in a timely manner. The key to resolving this account in an affordable manner is to contact the creditor’s attorney as soon as possible before the creditor escalates its collection efforts any further.

Due to the fact that this creditor has filed a lawsuit against you, you may wish to consult with an attorney in your area to discuss your situation and how you should respond to the lawsuit. In addition, your attorney could likely assist you in negotiating an affordable repayment arrangement with the creditor, which may be easier if you feel uncomfortable contacting the creditor’s attorney yourself. Also, if for some reason this creditor is not willing to negotiate affordable repayment terms, an attorney should be able to discuss the alternatives available to you to help you resolve this lawsuit. Bills.com offers some tips for consumers who are trying to negotiate with their creditors, available online at the debt settlement section.

As I mentioned, the most important steps for you to take right now are to determine how much you can afford each month, and to then contact the creditor to try to work out a repayment plan to resolve this lawsuit. If you are able to reach an agreement with the creditor, I strongly encourage you to obtain a letter from the creditor or its attorney outlining the agreement upon terms before you make any payments to the creditor. Having a written agreement will provide you with evidence of the repayment plan if the creditor ever tries to renege on the settlement. If you would like to read more about the various options available to consumers struggling with their debts, I invite you to visit the Bills.com debt help page.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

119 Comments

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  • KP
    May, 2012
    Kennith
    Someone I know was just served , since I handle their bills can I contact her creditors or should I have my attorney do it?

    Also, a gas credit card company that I never used and cancelled is trying to claim I owe them money but I never used the card, what should I do, the bill is only $100 so it's not worth attorney fees but I know I don't owe them.
    0 Votes

    • BA
      May, 2012
      Bill
      1) It is unclear if you have power of attorney for "the someone you know." If you do not have power of attorney, you would be a good friend if you would explain the service of process and summons to this someone, and then help them find a lawyer to answer their questions.

      2) Regarding the gas credit card, on what basis does the issuer claim you owe $100? Was this an annual fee of some kind? Was the $100 the total of a series of transactions? If someone you did not authorize used the account, then file a claim with the card issuer. If, on the other hand, the $100 is an annual fee for opening the account, then I do not see you have much to stand on.
      0 Votes

  • HP
    Mar, 2012
    Herman
    What are the documents needed by the junk debtor to collect on a suit?
    0 Votes

    • BA
      Mar, 2012
      Bill
      Please see the Bills.com resource Debt Validation for a discussion of what level of proof is necessary to validate a debt.
      0 Votes

  • TG
    Feb, 2012
    Tammy
    Hello - I received a summons today on an old debt from a furniture company. I had full intentions on paying but ran into a financial situation where it was more important to pay medical bills and my hubby was out of work. I'be been reading about the SOL and even though the original transaction occurred in 2005 the date that is being ref in the Affidavit is three years later. If I was trying to go the route of the SOL wouldn't I be referencing the original date? Also - people have told me it is better to try to settle in court vs before since the lawyers are normally better to work with than the debt collectors - do you think that is total rubish? I'll be representing myself in TN
    0 Votes

    • BA
      Feb, 2012
      Bill
      The Statute of Limitations is based on a running clock from the date of your last payment, not when the original transactions took place. If you feel that the debt has passed the SOL, then go to court and raise the SOL as an affirmative defense. Why settle the debt, if you are not legally required to pay it?

      You may want to speak with a lawyer, who can review all the facts and give you a professional opinion on whether the SOL will protect you. He or she can review the opposing side's paperwork, to weigh the validity of its claim that the proper date is 2008.
      0 Votes

  • JV
    Sep, 2011
    Joy
    I entered into a stip judgement w/ a creditor/atty on an old credit card debt. They both know I have retained a bk atty but I couldn't open the file before the court date. I should be filing the bk within 2 weeks. They are trying to collect on the judgement. Can they do this? Is there a period of time between the filing of the judgement and when I HAVE to begin payments? Any info would be appreciated.
    0 Votes

    • BA
      Sep, 2011
      Bill
      A judgment-creditor can begin collections as soon as it has the judgment in hand. I know of no statutory waiting period in any jurisdiction that mandates a waiting period before collections can begin.

      Just because a judgment-creditor asks you to start payments on the judgment does not mean you need to do so, unless a court so orders it. Consult with your bankruptcy lawyer about this issue. He or she has details about your judgment that I do not.
      0 Votes

  • VG
    Sep, 2011
    Vanessa
    I had several credit cards when i lived at usa (florida). I could'n get the residence so i was deported to mexico (2006) and the bills were not paid... what can i do??
    0 Votes

    • BA
      Sep, 2011
      Bill
      I see two options: Pay the balance as you can, or ignore the debt. If the debt is small, then I doubt the credit card issuer will attempt to locate you. If the debt is large, then you can expect the credit card issuer will attempt to collect the debt in your home country.
      0 Votes