A Nebraska resident who has been sued for unpaid debt can try to negotiate a settlement before their court date. To do this, you should respond to the lawsuit, send a settlement offer as a starting point for negotiations, and obtain a written agreement of the settlement.
There is no doubt that debt is something that most people have to deal with. Everyone has obligations to fulfill, whether credit cards, auto loans, or mortgages. However, there are times when consumers find themselves trapped in too much debt or something happens in their lives that prevent them from making their regular payments.
If you stop paying a creditor, they will likely begin contacting you and sending you letters. They may charge off your account or start a debt collection proceeding if enough time passes.
A debt collection lawsuit may result in a judgment against you if you receive notice of it. A review gives creditors and debt collectors additional rights, such as garnishing wages or freezing your bank account. Depending on the nature of the case, they may even be able to seize your property.
It is usually possible to settle your debt before your court date, avoiding a judgment and allowing you to move forward with your life.
You must follow a few steps to settle your debt in Nebraska.
Here are three steps to settle a Nebraska debt

You can begin the debt settlement process by following these three steps:
- You should respond to the debt lawsuit with an Answer.
- Start the negotiation process by making an offer.
- Ensure that the settlement agreement is in writing.
1. You need to respond to a debt lawsuit with an answer
When you receive a Summons and Complaint from a creditor or debt collector, a debt lawsuit commences. Summons informs you of a lawsuit, while Complaints state the reasons for the lawsuit, including failure to comply with the repayment terms of the obligation, the total amount owed, and interest and penalties.
People must ensure they receive a legal response from their creditors to avoid a default judgment. The legal response, also known as an Answer, explains the creditor’s failure to repay the debt. You may use the following defenses in your Answer, such as improper validation of the debt or expired statute of limitations.
When you receive a debt lawsuit in Nebraska, you have 30 days to respond. If you fail to respond by the deadline, you will likely lose the case by default. A default judgment can result in creditors and debt collectors garnishing your wages and attaching liens to your property.
If you intend to settle the debt before your court date, you should still file an Answer, which protects you from a judgment if your settlement efforts do not succeed.
2. Make an offer to begin negotiations
You need to review your savings account and any upcoming paychecks to determine how much you can offer in a settlement. Consider working part-time, selling personal items you no longer need, or seeking help from family and friends if you do not have much cash available.
Ideally, you should offer your debt settlement company approximately 60% of the total amount of your obligation since that amount is significant enough for your creditor to consider accepting the offer over filing a lawsuit.
In most cases, creditors and collectors will counter your offer with one of their own. It may take several rounds of negotiations before you reach a final agreement. Maintain your composure throughout the process, and do not accept an offer you cannot get.
Creditors or debt collectors may become more understanding and accept a lower offer if you explain your financial circumstances.
You will likely have a judgment entered against you if you accept a settlement and file to meet its terms.
3. Ensure that the settlement agreement is in writing
A written agreement ensures that you and your creditor understand each other’s obligations before any money is transferred to your creditor.
In your settlement agreement, you’ll list the amount you’ll repay, when it’s due, and how you’ll transfer the funds. The payment should contain language stating that your payment waives the creditor’s right to the remaining amount due, and your lawsuit against you should also be dropped.
A notary will witness your contract, adding further legal credibility to the agreement. You should provide a place where you and your creditor can notarize the agreement.
The following is an example of how to settle a debt in Nebraska:
Suppose Nora received a subpoena notifying her that Payday Loans 4 Everyone is suing her over a debt she owes. The amount of the lawsuit is $1,000, and she cannot repay it all before the court date, so she decides to go through the settlement process. In response to the lawsuit, Nora filed an Answer and contacted Payday Loans 4 Everyone to begin the negotiation process. Nora offers 40% of the debt, or $400, as a starting point.
Payday Loans 4 Everyone counters with an offer of $600, which Nora accepts. To save money, Nora drafted up a debt settlement agreement that both she and Payday Loans 4 Everyone had to sign before the settlement money was transferred. Payday Loans 4 Everyone dropped the lawsuit against Nora, and she ended up saving hundreds of dollars.
How do Nebraska’s debt collection and debt settlement laws work?
Under the Fair Debt Collection Practices Act (FDCPA), Nebraska adheres to a set of rules that prohibit debt collectors from engaging in certain deceptive and abusive practices, including:
- Making calls to consumers before 8 a.m. or after 9 p.m.
- Collecting a debt by using obscene or threatening language
- Informing the creditor that they will be jailed if they fail to repay the debt
- Overcontacting a consumer
- Making contact with the consumer while they are at work despite the consumer’s request not to do so
Aside from the guidelines under the FDCPA, Nebraska has enacted its legislation concerning debt collection practices. NE Code 45-1047 (2012) prohibits debt collectors from:
- Informing the borrower that they have committed a crime when they have not
- Threatening the consumer with legal action, they are unable to take
- Intentionally soliciting a postdated check to risk criminal prosecution
- Misrepresent the amount of the debt
A statute of limitations laws in Nebraska limit the amount of money creditors can collect from a debt. Under NE 25-205, creditors can pursue written debts for five years. However, NE 25-206 notes that oral accounts are subject to a four-year statute of limitations. By NE 25-212, debts involving open accounts are subject to a four-year statute of limitations.
In addition, the Federal Trade Commission has recently amended its Telemarketing Sales Rule to extend regulation of debt settlement to all debt relief organizations and companies. All 50 states, including Nebraska, are governed by this Rule.
As a result of the new Rule, any company that provides debt relief services, including debt settlement companies, will not be permitted to:
- Deb settlement companies must only collect consumer fees after the debt has been effectively settled or resolved.
- More information about the program’s services to consumers must be addressed before enrollment. As part of this, consumers should be informed about the cost of the service, how long it will take to see results, how much money they should save before they are offered a settlement, the consequences that may result if they do not make payments on time, customer rights, and other important information.
- Fraudulent or unsubstantiated claims may not be made regarding a debt settlement company’s services.
Is there a good debt settlement company?

Debt settlement agencies can offer assistance in settling debts. However, be aware that many of these agencies are scams and charge exorbitant fees that cancel out any savings you might have made.
You may also wish to consider the following debt settlement companies:
- Freedom Debt Relief, one of the nation’s largest debt settlement companies, has assisted over 750,000 individuals in resolving their outstanding debts. With Freedom Debt Relief, you can bundle multiple debts for settlement, and the company will negotiate directly with the debt collectors. Services can range from 15 to 25% of your total debt.
- Individuals with unsecured debt, such as credit cards and medical obligations, may qualify for debt settlement services through Accredited Debt Relief. Individuals must have at least $10,000 in debt for Accredited Debt Relief services to be offered. The company charges between 15 and 25% for its services, and the programs last from two to four years.
- Over 400,000 people have been helped by National Debt Relief to obtain debt relief through its programs specializing in unsecured debt such as credit cards, medical bills, and personal loans. Consumers are expected to complete their programs in two to four years and are charged fees ranging from 15 to 25% of their total debt.
- Another debt relief company that is popular with customers is Century Support Services. Since 2012, this company has assisted customers with more than $1.7 billion in debt. Century Support Services charges a fee of 18% to 25% depending on how much debt the client seeks to settle.
how to get in touch with a creditor
It is possible to contact your creditor by email, phone, or mail if you are ready to begin the debt settlement process.
Email is recommended since it is quick and allows you to keep a record of your communications. An email will enable you to consider your responses before responding to the debt collector.
Some people prefer to speak directly with their creditors. You should record the conversation if you choose to call your debt collector. Under NE Code 86-290, recording a conversation with one party’s consent is legal. You will be the individual who consents to the recording.
Debt settlement FAQs for Nebraska

There are several likely questions you have regarding debt settlement in Nebraska. Here are a few of the most common ones:
Can you tell me what percentage of the debt I should offer to settle?
It is essential to decide how much you will offer as a settlement. The higher the amount you offer, the more likely your debt collector will accept your payment. A settlement offer of at least 60% is recommended.
It may be necessary to explain your financial situation to your debt collector if that is too much for you. Your debt collector may be willing to work with you to find a mutually beneficial solution.
How long does it take for a Nebraska debt to become uncollectible?
Once the statute of limitations for the debt has expired, your creditors cannot take legal action against you. Generally, oral and written obligations have a four-year statute of limitations, whereas written accounts have a five-year statute of limitations. However, your sneaky creditor may still report the version adversely even if the debt has passed the statute of limitations.
Is it possible for me to settle my debt on my own?
You can handle your debt settlement. Research the process to understand better how it works and save some money toward your payment. Once you are ready, contact your creditor to begin the settlement process.
With some effort, you can settle your debts
There’s no doubt that debt settlement is not an enjoyable process. However, once you complete it and satisfy your obligation, you can move on from one of the most challenging times in your life. You won’t have to worry about legal action or other collection calls.
Debt settlement is negotiating with creditors to reduce the total debt you owe. This can be a complex process, but sticking to it can help reduce your debt and allow you to start fresh with your finances.