{"id":354928,"date":"2016-08-08T08:50:16","date_gmt":"2016-08-08T14:50:16","guid":{"rendered":"https:\/\/www.creditrepair.com\/blog\/?p=354928"},"modified":"2022-03-29T21:29:30","modified_gmt":"2022-03-30T03:29:30","slug":"should-you-ever-agree-to-debt-settlement-part-two","status":"publish","type":"post","link":"https:\/\/www.creditrepair.com\/blog\/finance\/should-you-ever-agree-to-debt-settlement-part-two\/","title":{"rendered":"Should You Ever Agree to Debt Settlement, Part Two"},"content":{"rendered":"

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\nThere are different times in the life of the debt collection process that you could be offered debt settlement and that makes a difference in how you initiate or respond to a debt settlement offer or agreement.<\/p>\n

Initiating a debt settlement with the collections agency yourself<\/strong><\/h2>\n

The first type of debt settlement may be possible after you have defaulted on the debt (or not made a payment in about 120 days) and the debt has been referred to a collections agency. This collection agency will do anything it can to collect on the debt, even as far as collecting just a portion of the debt, to be satisfied.<\/p>\n

If you receive a bonus, a tax refund or some other cash windfall, this is the perfect time to call up the collections agency yourself, as I described in\u201cShould You Ever Agree To Debt Settlement? (Part 1),\u201d<\/a> and offer to pay a lump sum that is less than the total debt owed in exchange for the debt being satisfied.<\/p>\n

I also described why it\u2019s never a good idea to contract with a debt settlement company to do this for you because, without money in hand, you can\u2019t initiate a settlement with any collections agency and these debt settlement companies can\u2019t guarantee that any creditor will accept a settlement, even after you\u2019ve paid, among other consumer abuses.<\/p>\n

Last year, the Consumer Financial Protection Bureau (CFPB) regulated industry debt collection practices for both original creditors and collection agencies who buy these debts so they cannot harass you or threaten you. But they can sue you to collect on the debt.<\/p>\n

What to do if you receive a notice to appear in court for a debt collection<\/strong><\/h2>\n

If you receive a notice to appear in court regarding any of your unpaid debts, you are being sued by a debt collector. This is what happens after you\u2019ve ignored correspondence by the collections agency (or several) demanding payment because they have the right to sue you to collect on the debt as long as it is within the statute of limitations for your state.<\/p>\n

But, most people have no idea what to do when they receive this type of scary letter.<\/p>\n

According to the CFPB<\/a>, here\u2019s what you should do if you receive a summons to appear in court for a debt collection case:<\/p>\n