If you settle your caseby paying part or all of the debt
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 alesser amount and having the other side agree to accept that amount as full payment
Like any other agreement you negotiate, this agreement should be confirmed in writing.
If a creditor has an attorney, all communications, negotiations, and payment must go through the attorney's office (unless you have instructions to do otherwise.)
Have the Plaintiff dismiss the case
Your case won't be dismissed automatically if you settle. The Plaintiff shoulddismiss the case as part of your agreement.
As part of your agreement, you should have the other side agree to dismiss the lawsuit it has filed with prejudice. This legal term is an important part of your agreement because it means that the Plaintiff can't file another lawsuit against you for the same debt.
Once you've completed a writtenagreement and you've paid the amount you agreed on, the Plaintiff should dismiss the case andserve you with a copy of the Request for Dismissal (form CIV-110) before itfiles that form with the court. Alternatively, the Plaintiff may file a Notice of Settlement of Entire Case(form CM-200) and file the dismissal within 45 days.
Settling after a judgment
If instead you pay or settle after a judge makes a decision in a trial (after a judgment is entered), you should still confirm the arrangement in writing, and the Plaintiff should issue an Acknowledgment of Satisfaction of Judgment (typicallyform EJ-100). The plaintiff will either file a copy of this form with the court or will send you a notarized copy of this form.
If you agree to make payments over time
If you agree to settle a lawsuit by making payments over time, there are several ways that you and the Plaintiff might handle the agreement to pay overtime:
- Draft a new contract and dismiss the case
You and the plaintiff could draft a new contract describing your agreement for making payments and thendismiss the case. If you break the contract, the plaintiff can file a new lawsuit. - Draft a settlement agreement and conditionally dismiss the case
You and the Plaintiff draft an agreement that says thecase will be dismissed, and you will make payments over time. If you break theagreement, the plaintiff can ask that the dismissal be vacated(canceled) and the case continue. - Draft a stipulated judgment
You and the plaintiff draft an agreement that says the court will order you to pay the specific amount (orenter a judgment against you). But that the plaintiff will not enforce the judgment as long as you make monthly payments. If you don't make monthly payments, the plaintiff can ask the judge to order you to pay the full amount minus payments you've made and may seek to collect.
Go back to review your options
FAQs
In order to respond, you must file an Answer into the case, which costs $225-$450 depending on how much debt is owed and in which court the case is filed. In your Answer, you should respond to each claim against you and assert your affirmative defenses.
How to challenge a debt claim? ›
If you want to assert your right to verify the debt, you must send your dispute letter within 30 days of receiving notice of the debt from the debt collector. Still, if you have a good defense to the debt, you might want to dispute the debt even though more than 30 days have passed.
Can I settle a debt after being sued? ›
Yes, you can settle a debt even if a lawsuit has already been filed against you. Some lenders may allow you to pay off your debt through either a repayment plan or partial lump-sum settlement. Either way, ignoring a debt is not a good option.
What is a reasonable offer to settle a debt? ›
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.
What to say to creditors to settle debt? ›
“As for the negotiations, be persistent and persuasive,” Schwab says. “Write down your arguments beforehand and make them sympathetic to your case.” Share any truthful reasons you may be having a hard time and show that you want to pay as much debt as you can.
How can I settle my debt without paying? ›
Outside of bankruptcy or debt settlement, there are really no other ways to completely wipe away credit card debt without paying. Making minimum payments and slowly chipping away at the balance is the norm for most people in debt, and that may be the best option in many situations.
What is the statute of limitations on debt collection in California? ›
Debt collectors may not be able to sue you to collect on old (time-barred) debts, but they may still try to collect on those debts. In California, there is generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement.
On what grounds can a civil case be dismissed in California? ›
Motions to dismiss are filed for a range of reasons, which may include: Statute of limitations expiration: The case does not fall within California's time limit for filing. Lack of subject matter jurisdiction: The court does not have the authority to hear this type of case.
How do I remove a debt settlement? ›
Unless the information reported to the credit bureaus is incorrect, you won't be able to remove the settled account from your credit report. You can try to negotiate with the creditor, but legally the debt can stay on your credit report, regardless of payment status.
How do you get a Judgement removed in California? ›
Yes, removing a judgment lien is possible, but it's a complex process that involves paying off the debt, negotiating a settlement with the creditor, or filing a motion to vacate the judgment. All these options have their own complications and should be navigated with the help of a lawyer.
