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?
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.