Most consumers drowning in debt would greatly benefit from a fresh start to rebuild their financial status and improve their credit scores. Debt settlement is an option when you have a stable income and can save for several months. You can plan for settlement if you anticipate receiving a lump sum from an investment or gift.
Having a paid entry on your credit report may take time to improve your credit score, but it is better than having the debt appear unpaid. Additionally, you are a skilled negotiator. In that case, you can request that the creditor remove the debt from your credit report in exchange for clearing it.
In today’s article, we will explain how to settle a debt following the receipt of a lawsuit at any point in the collection process. Additionally, we will provide other helpful information to help you get the most out of Oklahoma debt settlement.
Here’s how to settle an Oklahoma debt
It is common for consumers to avoid paying a debt because they fear facing creditors or debt collectors, especially if they haven’t paid it for months or years. Most creditors are interested in settling because they would rather receive a substantial percentage of their money than nothing. Debt collectors are also often willing to pay for less than the original debt amount since they often purchase old debts for pennies on the dollar.
Follow these three steps if you have been sued for a debt you owe before going to court. In the absence of a lawsuit, you may proceed to step two:
- Answer the debt lawsuit.
- Negotiate a debt settlement offer.
- Obtain a written settlement agreement.
1. Answer the debt lawsuit
You must respond to the lawsuit if you intend to settle with the creditor. If you file an Answer within 20 days of being served with the complaint, you will retain the case by default.
In the absence of a response, the court assumes that you are choosing not to follow up on your case and, therefore, are admitting each claim against you. Thus, the court may impose a default judgment against you, giving your creditor or debtor the right to garnish your wages, place a lien on your property, or access your bank account.
In the lawsuit, you will find a Complaint document listing all the allegations made against you by the creditor. According to Oklahoma law, you may respond to each allegation in three ways: admit, deny, or deny because you lack knowledge.
In the following section, you can list your affirmative defenses. Look for valid and provable reasons that can assist your case. It is possible that the creditor or collector will not settle with you, and you will have to take your case to court. However, in most cases, they prefer to pay rather than go to court.
It is still recommended that you file a response to the lawsuit even if you intend to settle your debt before a court. In this way, you have the time to work out a settlement agreement without the threat of a default judgment hanging over your head.
For example, Express Collections sued Sarah for an outstanding debt of $6,200 in Oklahoma. Even though she knew that filing an Answer was mandatory, she was seeking another option other than going to court. Sarah sent and received settlement offers after responding to the lawsuit until she reached an agreement with Express Collections. According to Sarah’s first offer, she was able to pay off $1,900 (30% of the debt). As a counteroffer, Express Collection requested $4,900 (79%). Through email, they negotiated until she agreed to pay $3,720 (60%).
2. Negotiate a debt settlement offer
Following the filing of the Answer in court, consider the best method of making the settlement offer: do it yourself, hire a debt settlement company, or use SoloSettle. To determine which form to use, you must decide how much you have and are willing to part with comfortably. For example, determine how much money you need for necessities and subtract other essential expenses.
It is recommended that you refrain from purchasing items that you do not require during this period. Consider having an accountability partner to assist you in spending wisely. Add the remaining funds (after subtracting expenses) to your debt repayment savings. You will need to save for several months before making a settlement offer if you do not have any savings.
It is also essential to consider the percentage a creditor or collector may be willing to accept as a settlement. The original creditor may accept an offer ranging from 40 to 80% if the debt is still in their hands. In the case of a debt collection agency that has purchased the debt, they may accept an offer ranging from 10 to 60 percent.
It is best to begin negotiations at or below the lowest range to achieve the best results. Before reaching an agreement, you are likely to receive several counteroffers.
3. Obtain a written settlement agreement
There are some creditors and collectors who could be more honest. Most creditors will agree to include the debt as paid off on your credit report but will reverse their position after you have paid. To mark the remaining balance as clear on your credit report and in their records, you will need to pay the remaining balance.
A debt settlement example in Oklahoma will help you understand how the process works.
To avoid falling into this trap, ask them to write everything, including the amount they will pay and the actions they must take to demonstrate they have accepted the settlement. Below is a sample debt settlement template with the key points you may wish to include.
Debt collection and settlement laws in Oklahoma
Unlike most states, Oklahoma has few specific regulations regarding debt settlement. Debt settlement laws in this state are primarily based on the Fair Debt Collection Practices Act. Despite these laws, a debt settlement company is prohibited from using illegal collection practices. It ensures that they follow correct debt settlement procedures. Other guidelines in Okla. Stat. tit. 24 states that debt settlement companies should not:
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- Services are charged at exorbitant rates
- Give you false hope about your debt situation
- They fail to deliver the services they promised
According to Oklahoma Statutes Title 24 section 14, anyone violating the collection laws will be guilty of a misdemeanor and fined between $100-$500 or imprisoned for 30 days. Furthermore, suppose the company is found to have violated the FDCPA. In that case, the company must pay up to $1000 per violation as a penalty.
In addition to these debt collection laws, the Federal Trade Commission has recently amended its Telemarketing Sales Rule to apply to all debt relief organizations and businesses. As it relates to debt settlement practices, this Rule applies to all 50 states, including Oklahoma.
Companies that provide debt relief services, such as debt settlement companies, are prohibited from:
- Fees are charged upfront. After their debt has been effectively settled or resolved, consumers can only be charged fees by debt settlement companies.
- Fails to disclose certain information about its services before enrolling a consumer. In this section, we will discuss the cost of the service, how long it takes to see results, how much money must be saved before an offer of settlement is made, the consequences that may arise if the consumer fails to make payments on time, and the rights of the consumer.
- Misrepresent the quality of their services. A debt settlement company cannot make false or unsubstantiated claims about its services.
Is there a good debt settlement company?
In many cases, debt settlement companies take advantage of consumers’ desperate circumstances and violate most laws; in other cases, they are outright scams.
To help you with your search, here are four debt settlement companies to consider:
- Century: With the help of Century, you will be given a comprehensive debt assessment, and you will be given the best option.
- National Debt Relief: Working with National Debt Relief, you will be able to regain financial stability within 12-24 months after working with them.
- Citizens Debt Relief: With Citizens Debt Relief, you can achieve financial freedom by consolidating unsecured debt.
Contact the debt collector using the best method
Debt collectors can be very irritating if you have been involved in a telephone conversation with them. Understandably, you feel anxious to contact them for a settlement offer. However, it is often the case that they are willing to negotiate once they realize you are ready to pay them. If you want to settle a debt with a debt collector, you can use the following methods:
- Phone: It is good to call the creditor to make an offer if you record the call. Fortunately, Oklahoma law stipulates that only one person must consent to the recording for it to be legal. In other words, if you reach an agreement over the phone, be sure you have proof.
- Mail: A settlement offer sent via mail will prolong the process as it takes a few days for the mail to be delivered. As a result, you have ample time to contemplate your response and make a more informed decision.
- Email: This method has several advantages, including faster completion of the process and a complete record of the negotiations. Contact the creditor for their active email address or the lawyer handling the case if you need to know their email address.
Oklahoma debt relief
Besides debt settlement, other options are available to assist you in getting out of debt, such as debt consolidation (paying off debt in stages) and bankruptcy. Read this complete guide to Oklahoma debt relief before selecting any options. In addition, you should speak to a credit counselor who can provide you with actionable advice based on your specific financial situation.
Oklahoma debt settlement FAQs
What is the process of debt collection in Oklahoma?
Oklahoma debt collectors begin by calling or sending an email requesting that you resume payment of the debt. In addition to contacting you numerous times, they may use threats to compel you to pay. If all attempts fail, they will enter your debt into your credit report (if they have not already done so) and take you to court to obtain permission to garnish your wages or access your bank account.
To pay off debt, how do you create a reasonable budget?
Start by keeping a record of all your income and expenses. Set aside the money you save by cutting back on things that are not necessities in your new budget. You should continue to assess what you can cut back on further or how you can increase your income streams. You can negotiate a settlement with your creditor if you have sufficient funds.
How does debt settlement affect my credit score?
You should know that debt settlement can significantly impact your credit profile if you have a good credit score. Nevertheless, you have many negative entries on your credit report. In that case, debt settlement will not significantly impact your credit rating. Paying off your debts puts you in a better position than not paying them.