In Mississippi, you have 30 days to respond to a debt lawsuit, but you can get in touch with your creditor or debt collector to settle a debt at any time during the lawsuit process. The first thing you need to do is respond to the lawsuit with a written response. Next, send the settlement offer to begin negotiations. Finally, you will need to get the settlement agreement in writing.
The fact that you have an unpaid debt you wish would disappear or that a creditor has sued you in an attempt to collect on the debt may be causing you to wonder what to do next. After all, ignoring the lawsuit will not disappear and might make things worse for you.
If you are struggling with debt in Mississippi and facing a lawsuit due to it, you can settle your debt for less and get your financial freedom back.
In the case of debt settlement, you are allowed to work out an agreement with your creditor or debt collector to repay a portion of the debt in exchange for the court dismissing the lawsuit and stopping further collection activity from taking place.
Keep reading to find out how to settle a debt in Mississippi.
To settle a Mississippi debt, follow these three steps:
- An answer should be provided in response to the debt lawsuit.
- An offer should be made for settlement.
- Make sure you have a written agreement.
Getting rid of debt before your court date will require you to go through these three steps.
1. Answer the debt lawsuit
To begin the debt lawsuit process, your creditor must file a Summons and Complaint against you with the court. You will find information in the Complaint regarding your debts, such as the balance you owe, your interest and fees, and court costs. Other information may also be included.
Please don’t ignore the court documents when you receive them. The court may grant you a default judgment against you if you do. Even though you plan to settle the debt with your creditor before your court date, you must file an Answer to the case before the deadline. Any judge’s responsibility is to provide an Answer to prevent a default judgment from being issued.
If you receive a debt lawsuit in Mississippi, you have 30 days to respond before automatically losing your debt by default judgment.
You can use your Answer as an extra layer of defense and protection. You will list reasons for not paying the debt, for example, the lack of jurisdiction over your case or the expiration of the statute of limitations. You can use several reasons to defend yourself, provided they are true.
It is important to remember that if you fail to settle the debt before the court date, the judge will need to review your Answer and supporting evidence before making a decision. You will also be able to present an oral argument in court.
Immediately after you have filed your Answer with the court, you must send a copy of it to the opposing lawyer. You should also keep a copy for yourself.
2. Offer a settlement
To start the negotiation process, you need to figure out what you can afford to pay before you make your offer. You can do this by analyzing your current savings and your upcoming paychecks. If you are short of funds, you can sell a few items you do not need or borrow money from friends or family members.
Secondly, you will need to determine how much your creditor or debt collector may be willing to accept. Doing some research online can give you a good idea of how much they may be ready to settle for. Here are some questions to ask:
- Do you have a signed promissory note or a book account for the debt?
- Does the debt bear interest?
- Is there a valid fee-shifting provision? A fee-shifting provision requires the borrower to pay the collection costs.
- How long has it been since you made a payment on the debt?
- Does the original creditor own the debt, or has it been assigned to a third party?
- Is the debt part of a federal or state loan program or is it private?
- Is the debt secured?
- Can the debt be discharged in bankruptcy? Is it a student loan?
- Are there any meritorious defenses?
- Do you have any offsets?
When you know the answers to these questions, you can figure out the best amount for your initial settlement offer.
As a rule of thumb, consumers who work with a debt settlement company can settle a debt for 50% of the original debt value.
Nevertheless, to maximize your chances of settling your debt before your court date, we suggest you offer your creditor at least 60% of the total amount you owe. For example, if a debt collector sues you for $5,000, you would contribute $3,000 to settle the debt.
There is a good chance that the creditor will reject your offer and ask for a higher amount. It often takes several rounds of negotiation to agree on an amount in a settlement finally.
3. Make sure you have a written agreement
There should be a written agreement outlining all of the terms of the contract, including how much you will pay back and when you will be able to pay. Before making any payments, make sure you have a written agreement. Additionally, you should ensure that the price is delighted with your obligation and that you will not be subject to any further collection activities by the creditor.
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If you are going to pay your debt before the end of the month, you should ask your creditor to have the contract notarized. A notarized agreement further solidifies the deal, and you can refer to it if the collection agency decides to come after you later.
It is common for creditors and debt collectors to draft the agreement independently and fill it into the court case. Just read it carefully before signing it and ensure that it is accurate.
Let’s look at an example of settling a Mississippi debt.
A good example is Marie, who her credit card company has sued in Mississippi. She responds, allowing herself time to contact the creditor and negotiate a settlement with them. Maries has researched the credit card company and decides she may be able to repay up to 80% of the debt, so she sends her first settlement offer. After several negotiations, the credit card company finally accepted a settlement offer of 70% of the debt. She starts by offering 55% of the debt. As soon as Marie signs the agreement, it is filed into the case, and a voluntary case dismissal by the creditor is rubbed into the case as well.
How do Mississippi’s debt collection and debt settlement laws work?
Aside from the statute of limitations, Mississippi has no state-specific laws regarding debt collection. However, Mississippi abides by the federal Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using harassing or abusive techniques to collect debts.
The FDCPA, including the following, expressly prohibits several activities:
- Repeatedly calling you about a debt.
- Contacting you more than seven times per week.
- Contacting you about a debt at work after you asked me not to.
- Threatening you with jail if you don’t pay.
- I do not intend to follow through on legal threats.
- When on the phone, pretending to be someone else.
The state of Mississippi has a specific statute of limitations that creditors must follow if they intend to collect a debt from you through a lawsuit.
Under MS Code § 15-1-29 (2020), creditors have three years to collect on oral debts or open accounts. Debt collectors who have a domestic or foreign judgment against an individual have up to seven years to pursue the debt through legal means, according to MS Code § 15-1-43 (2013).
The consumer is entitled to a complete dismissal of the case if a debt collector attempts to collect on a debt after the statute of limitations has expired.
It should also be mentioned that the Federal Trade Commission has recently amended the Telemarketing Sales Rule to broaden its coverage to include all debt relief companies and organizations. All 50 states, including Alabama, are governed by this Rule regarding its application to debt settlement companies.
To comply with the new Rule, any company that offers debt relief services, namely debt settlement companies, cannot:
- It is illegal for debt settlement companies to collect fees before the debt is settled or otherwise resolved. Consumers cannot pay any fees to debt settlement companies before the debt has been effectively settled.
- The company can only disclose certain information about its services after a consumer enrolls in the program. Among the important aspects of this service are how much it costs, how long it takes for the customer to see results, how much money must be saved before a settlement offer can be made, the consequences that may occur if the consumer fails to make payments on time, the rights of the customer, and many other concerns.
- It is illegal for debt settlement companies to make false or unsubstantiated claims about the services they provide. It is unlawful for them to make unsupported or inaccurate claims.
How do I choose the best debt settlement company?
Consider one of these debt settlement companies based on the needs you have.
National Debt Relief
Currently, National Debt Relief is the country’s largest debt settlement company. Founded in 2009, National Debt Relief has settled more than $1 billion in outstanding debts for its clients. A typical client can complete the National Debt Relief program within 2 to 4 years of enrolling. The program fee is 15% to 25% of the total value of the consumer’s debts.
Freedom Debt Relief
A second large provider of debt settlement services is Freedom Debt Relief. During the past few years, the company has helped over 650,000 clients resolve their debts. Those interested in the program should expect it to last between two and four years. Like National Debt Relief, Freedom Debt Relief charges clients a 15% to 25% fee for their services.
To begin the debt settlement process, how should I contact my creditor?
If you are interested in handling the debt settlement process, you can contact your creditor in one of three ways: by writing a letter, sending an email, or making a telephone call.
If you are facing a debt lawsuit, you would be better off starting the process by sending an email or making a phone call. Both methods are quick, and you can reach an agreement well before you go to court.
In case you choose to contact the debt collector, it is advised that you record your conversation. Only one party needs to consent to the recording of the conversation. You are the one giving consent, and you can use the recording if the creditor decides to pursue further collection activities despite the oral agreement you made.
Mississippi debt settlement FAQs
The following are some of the most frequently asked questions about settling a debt in Mississippi.
To settle a debt, what percentage should I offer?
There is a report that states that if a consumer works with a debt settlement company, they can be able to settle their debts by 50% on average, according to America Fair Credit Council’s Regan Report.
You should start your negotiations with at least 60% of the value of the debt to convince the creditor that you are serious about settling the debt.
If you cannot afford to pay so much, you should start your offer at a lower rate. You could describe the financial hardship you’re experiencing, such as a lack of savings or losing your job, if that helps.
Do I have the option of doing my own debt settlement?
Some people have indeed succeeded with DIY debt settlement in Mississippi. With a little bit of elbow grease, you can negotiate a settlement with your debt collectors, saving you a lot of money. To deal with your creditors, you must set aside money and learn how debt settlement works before you begin.
How does Mississippi Debt Relief work?
It is an organization that advises people in Mississippi about their options for getting out of debt. This organization is not a debt settlement company. Those who sign up for help from Mississippi Debt Relief will be provided financial management advice.
With or without help, you can settle your debt in Mississippi
Having to deal with debt collectors and creditors can be quite a burden at times; however, at some point, you’ll need to face up to the debt you owe and make arrangements to pay it or settle it as soon as possible. If you don’t, your debt collector might go ahead and sue you for the debt.