Debt settlement has prevented many South Carolina residents from filing for bankruptcy. It is common for creditors and debt collectors who accept debt settlements to want to close delinquent accounts to enhance their portfolios. Some companies prefer to take a small percentage of the revenue rather than lose the entire amount.
If you still have an income stream, you should consider debt settlement. You should plan to save between 60 and 80 percent of the total amount of your debt. In the following step, you should approach the creditor through a debt settlement company or on your own and offer to settle the debt.
Throughout this article, we will discuss how to obtain the best settlement deal in South Carolina.
3 Steps To Settle Debt In South Carolina
The debt settlement process is faster than other debt management options. In most cases, it takes around two to three years for a debt settlement company to settle all your debts, whereas debt consolidation usually takes five to nine years. Furthermore, debt settlement may be a better option than bankruptcy since you are in control of your finances rather than a court.
When you receive a debt collection lawsuit in South Carolina, you should follow these steps:
- Respond to the debt lawsuit with an Answer.
- Make an offer to start settlement negotiations.
- Get the debt settlement agreement in writing.
1. Answer The Debt Lawsuit
There are a large number of South Carolina debt lawsuits that result in default judgments against consumers because they do not respond to the lawsuit or are unaware that they must file an answer with the court. If you are a defendant, you are required to file an Answer before the settlement process can begin.
If you are sued, you should receive a Complaint document listing all the allegations made against you by the creditor or debt collector. It is your responsibility to respond to each claim in one of three ways: admitting, denying, or denying due to lack of knowledge. To force the creditor or collector to prove their case, lawyers recommend denying as many claims as possible.
The next step is to list your affirmative defenses. If a creditor rejects your settlement offer, these reasons may help your case. In most cases, however, they would rather settle than go to court.
An answer to a debt lawsuit must be filed within 30 days of the filing of the lawsuit to prevent an automatic default judgment. This type of judgment entitles creditors and debt collectors to garnish your wages and seize your property. You need to respond to the case if you want to avoid default and work out a settlement agreement.
2. Make A Settlement Offer
Choose a settlement method that suits your needs after you have filed the Answer and confirmed it is in the South Carolina court records. As you make your decision, take into account the following factors:
- Decide how much you can save to offer the creditor: Avoid approaching a creditor if you lack the funds to make an offer. If you request more time to make a down payment, they may decline your request. Consider reducing expenses until you can save a significant amount of money if you do not have sufficient funds.
- Consider the amount that the creditor is willing to accept: If you approach the creditor with an extremely low offer, they may refuse to accept the settlement. You should begin by offering a reasonable amount that will attract their attention. Collection agencies can accept between 10 and 60% of your debt, while original creditors generally settle for 60 to 80% of the debt owed.
Send your creditor or debt collector a settlement offer once you have determined how much you can pay. As an example, you might say:
“I see you’re suing me for [$___] for [case number]. I don’t have that kind of money and I don’t agree with the amount. But I do have [$___] that I can pay within 30 days to settle the debt in full. Let me know if you accept.”
3. Get The Settlement In Writing
Debt collectors have deceived many consumers by promising to close accounts after a settlement agreement but were unable to fulfill their promises. It is common for them to request that you pay the balance to honor the commitment they made during the negotiation process. Be sure to obtain a written settlement agreement to avoid falling into this trap.
In the agreement, you should include a description of your debt account, the amount the creditor accepted as full payment, any promises you made after making payments, and any relevant laws that apply to your situation. As a guide, use this debt settlement sample to ensure that all important information is included.
Here is an example of how to settle a debt in South Carolina:
As an example, Danny, who lives in South Carolina, is being sued by Dynamic Recovery Solutions for an old credit card debt of $5,000. In response to the lawsuit, he files an Answer within 30 days. Next, Danny examines his finances to determine how much he can afford to pay now to settle the debt. The first settlement offer Danny sends is for 60% of the debt amount ($3,000). A settlement of 70% of the debt ($3,500) is reached after several rounds of negotiations between Dynamic Recovery Solutions and the debtor. After saving some money, Danny feels ready to start over financially.
Some South Carolina Debt Settlement Laws Can Protect You
As a result of South Carolina’s debt settlement laws under the consumer protection code, consumers have been protected from being taken advantage of by debt settlement companies. As a result of these laws, these companies are obligated to charge consumers, operate their businesses, and educate consumers concerning debt. As an example, a debt settlement company should:
- The employees must be licensed and receive continuous training (SC Code 37-7-105)
- Fees should not be excessive
- Ensure that you do not make unreasonable promises to deceive the consumer
- It is necessary to ensure that a contract is issued for each agreement reached (SC Code 37-7-110).
- Prepare to pay a penalty if they violate any of the outlined laws (SC Code § 37-7-118)
Your attorney general’s consumer protection division should be notified if a debt settlement company violates these laws.
Some Of The Best Debt Settlement Companies
It is important to select a debt settlement company that will work with you and recommend practical steps to take to settle your debt. In addition, avoid debt settlement companies that require a down payment before they begin working on a debt settlement agreement. You may wish to consider working with the following companies:
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- Golden Financial Services: To determine how much you may have to pay for debt settlement, this company begins by calculating your potential costs. The experts then assist you in saving the required amount of money.
- Debt Quest USA: In addition to debt consolidation, Debt Quest also offers debt settlement services if you request them or if the program is right for you.
- New Era Debt Solutions: Before committing to any program, the specialist will provide you with a free debt analysis. In this stage, there are no obligations on either side.
Contact The Debt Collector In The Most Effective Way
Communication with debt collectors leaves you frustrated or angry, so no one likes to deal with them. Because you are offering them money, your conversation may be more successful this time. Choose one of the following methods of communication to ensure that you have a fruitful discussion:
- Phone: It is possible to reach a debt settlement agreement over the phone within minutes, but you may not have proof of the agreement unless you record the conversation. In South Carolina, you are permitted to record the conversation with one-party consent (SC Code 17-30-20).
- Mail: When you negotiate over the mail, you are assured of receiving a written agreement. Due to the delay in delivery, the process takes a considerable amount of time. It is advisable to use certified mail as a means of confirming receivership and expediting the communication process.
- Email: In terms of debt settlement, this method is the most advantageous because it is quick, efficient, and leaves a paper trail. You will probably be able to complete the negotiations and sign the agreement as soon as you obtain the correct email address.
Debt Settlement In South Carolina FAQs
What’s A Good Percentage To Offer In A Settlement?
It is recommended that you offer between 30 and 50% if you are negotiating with the original creditor. They are likely to counter your offer. In general, creditors accept between 60 and 80 percent of the original debt. In contrast, if a debt collection agency has acquired the debt, then you should offer between 10 and 30%. It is common for them to purchase the debt for a fraction of the original amount and will be willing to settle for a lower amount than the original creditor.
Is It Better To Settle Debt In South Carolina Or Just Pay It Off?
You should always pay off your debt in full since it does not affect your credit score as a settled entry does. Furthermore, a settled entry on your credit report is preferable to an unpaid entry.
Is There A Time Limit For A Creditor In South Carolina To Pursue A Debt?
A creditor may pursue a debt until the statute of limitations has expired (the debt has expired). Generally speaking, the statute of limitations for a mortgage in South Carolina is 20 years, for a credit card it is three years, for an auto loan it is six years, and for medical debt, it is three years.