Negotiate with a debt collector | California Courts (2024)

FAQs

How do I respond to a court summons for debt? ›

You must fill out an Answer, serve the other side's attorney, and file your Answer form with the court within 30 days. If you don't, the creditor can ask for a default. If there's a default, the court won't let you file an Answer and can decide the case without you.

Some of these factors include the time since your last payment, the total amount owed, whether your account is with the original creditor or a collections agency, and how much you can afford to pay. Typically, you should offer 60% or less of your debt amount to kick off negotiations.

Some will only settle for 75-80% of the total amount; others will settle for as a little as 33%. Looking for a place to set the bar? The American Fair Credit Counsel reports the average settlement amount is 48% of the balance. Again, start low, knowing the debt collector will start high.

You may settle your case at any time prior to having the court make a decision (a judgment) by either: Paying the full amount of the debt (plus any fees, costs, and interest required) Negotiating to pay a lesser amount and having the other side agree to accept that amount as full payment.

If you can afford to pay off a debt, it is generally a much better solution than settling because your credit score will improve, not decline. A better credit score can lead to more opportunities to get loans with better rates.

As long as you make on-time payments on your debts, debt consolidation and debt management won't harm your credit the way debt settlement will. Additionally, debt settlement may not save you any more than these other options after you factor in its fees and tax liability.

Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.

What happens if a debt collector won't negotiate? ›

That creditor might be willing to compromise with you. You could also suggest to the debt collector that if he or she refuses to settle, you will be forced to file for bankruptcy. This could motivate them to negotiate and settle your debt for less than you owe.

Although the average settlement amounts to 48% of what you originally owed, that number is a bit skewed. If your debts are still with the original creditor, settlement amounts tend to be much higher. You can end up paying up to 80% of what you owe if the debt is still with the original creditor.

So, even if you've been served, your creditor may prefer to settle out of court. Once a lawsuit is filed, it could present a new opportunity to negotiate a settlement with the debt collection lawyer. Plus, the court may encourage both parties to agree before the trial starts, especially if you owe a significant amount.

You may be able to negotiate a settlement with the debt collector to allow you to pay off the judgment under better terms. In Limited Civil cases (cases for $35,000 or less), if the other side will not agree to a payment plan, you can ask the judge to order a payment plan.

Negotiate with Creditors Directly

Go directly to the original creditor and see if you can negotiate a deal with them. One clear benefit to negotiating directly with creditors is the opportunity to settle your debt for less before the creditor turns the outstanding balance over to a collection agency.

The people you owe money to are called 'creditors'. If you owe money and you don't pay it back your creditor might take you to court. You should reply to the claim as early as possible - usually within 2 weeks. If you disagree you owe the debt, you can tell your creditor this when you reply.

Debt collectors sometimes use dirty tricks. For example, they might send fake summons to scare people into paying. This article will explain how to spot a fake summons from a debt collector. It will also guide you on what to do if you receive one and how to safeguard your rights.

Asserting payment or settlement of the debt is a common affirmative defense to assert when filing your answer to debt collection lawsuits. Most often, this comes up when the creditor fails to properly credit a payment or series of payments.

The statute of limitations for actions on notes and contracts, including credit card debt, is six years.