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  • Writer's pictureJovanna Bearden

I’ve been sued, is it too late to negotiate a settlement?

Many times when someone is sued they just want to pay the debt so the lawsuit will get dropped. I get tons of calls asking how to go about settling a debt after a lawsuit has been started. It can be difficult to figure out what to do because the creditor you owe money to likely won’t talk to you once they’ve filed suit against you.

What you’ll need to do is look on your lawsuit paperwork for the name and number of the law firm that is representing the creditor. Call this number and speak with someone about settling your debt. First thing you should do is ask about a hardship reduction of forgiveness. If you have a lump sum you can offer, see if it is accepted and if not, ask what the counter offer is. If you can afford a monthly payment, tell the creditor what that is and see if they will accept it to stop the lawsuit.

Usually a lump sum settlement will result in a dismissal of the lawsuit, while a monthly payment plan will result in you needing to sign a Consent Judgment document. This is a judgment that is filed in the lawsuit, ending the case. It usually will contain the terms of your settlement agreement. Another thing to note is a lump sum usually gets you a discount on the balance, while a monthly payment usually means you pay the full balance.

Make sure you get your settlement agreement in writing with the lawyer. Also be sure to go to all your court dates. If you do not go to Court, a judgment could be entered against you even if you are working on a settlement.

Hiring an attorney to negotiate for you means that you don’t have to talk to the law firm yourself, you don’t have to go to court, and you can make sure that your settlement agreement is correct and fair.

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