As soon as you get served with credit card lawsuit, you instantly go into panic mode. Instead of calling for a consumer rights attorney for a free consultation about debt collection defense, the first instinct you have is to call the collection company (or the law firm representing them) to see if its possible to work out a settlement to avoid a judgment.
Or maybe you are the few who are motivated to represent yourself without an attorney, and will manage to file a simple answer with the court. Afterwards, however, you don’t know the next steps of litigation. All the free information on the internet won’t help you when you get more legal documents from the other side in the mail or when opposing lawyer admits bad evidence against you in court faster than you can say, “objection.” Eventually, your debt collection case gets set for a hearing on a summary judgment motion, and you have done little to prepare for the case. Out of confusion, uncertainty, and frustration, you decide to settle for just about any dog bone offer.
Here are some things you should know before you decide to settle a debt collection case without the assistance of an attorney.
1. It’s a bad idea to represent yourself in a credit card lawsuit. No matter how clever you think you are, you will never beat the debt collection companies at their own game. You will lose lots of money and wreck your credit history. Even if you have money to settle, and that’s as far as you want to take your case, you will never get a better deal than if you were represented by a consumer rights lawyer. Your lawyer fees + the agreed settlement amount your lawyer got for you will be less than the settlement amount you will be able to get on your own. Also, your lawyer can craft the settlement agreement to force the collection company to delete the negative tradeline off your credit history and give you added legal protection in the event you are in default of the settlement agreement.
2. You will not get a settlement for “Pennies on the Dollar.” If you represent yourself, the debt collectors are not afraid of you. They know they will easily beat you in court. Not even the (empty) threat of bankruptcy scares them. Therefore, they have no incentive to give you a generous settlement offer. For unrepresented debtors, collectors make settlement offers within the range of 40% lump sum to 70% stretched-out payment plan over a year. A consumer rights lawyer will take your case as far as he can to ultimately get your case dismissed, or get a generous settlement offer. Debt collection companies are likely to make good settlement offers when there’s an experienced consumer rights lawyer on your side.
3. A settlement can turn into judgment against you. When you settle your case with a lump sum payment, the debt collection company should dismiss the case. Just make sure you get the settlement in writing and a copy of the dismissal order. If you can’t make a lump sum offer, you may decide to settle your case with a payment plan stretched over several months. With a “payment plan settlement,” your case isn’t really dismissed until you fully pay the agreed amount according to the terms of the settlement. If you miss a month of payment you will be in breach of the settlement agreement. The collection company will take you back to court and get a judgment for the entire amount of the debt plus attorney fees and costs. In short, if you decide to settle it yourself, then only do a lump-sum deal with a dismissal, otherwise, the extended payment plan will likely end up as a judgment against you.
Conclusion: When you are faced with a credit card lawsuit, it only makes logical sense to hire an experienced consumer rights attorney. A consumer right attorney on your side should save you money, prevent damage to your credit report, and most importantly, give you a good shot at getting the entire debt dismissed outright.
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