Ways you can settle a debt and dismiss your case | California Courts (2024)

FAQs

How to get a debt lawsuit dismissed in California? ›

In order to respond, you must file an Answer into the case, which costs $225-$450 depending on how much debt is owed and in which court the case is filed. In your Answer, you should respond to each claim against you and assert your affirmative defenses.

Debt settlement involves offering a lump-sum payment to a creditor in exchange for a portion of your debt being forgiven. You can attempt to settle debts on your own or hire a debt settlement company to assist you. Typical debt settlement offers range from 10% to 50% of the amount you owe.

Summary: An affirmative defense is a legal defense that a defendant uses to prove they are not liable. In a debt collection lawsuit, an affirmative defense is any legal reason that the defendant should not be held responsible for the debt. You must list your affirmative defenses when you respond to a debt lawsuit.

California Coerced Debt: California SB 975, for debts incurred after July 1, 2023, requires a collector to cease collection until it completes a review when the debtor provides documentation and a sworn statement that the debt was coerced. A person who coerces a debt is civilly liable.

You must fill out an Answer, serve the other side's attorney, and file your Answer form with the court within 30 days. If you don't, the creditor can ask for a default. If there's a default, the court won't let you file an Answer and can decide the case without you.

You'll want to include specific information concerning your account in your debt settlement letter. List your name, account information, the original creditor of the debt, and the debt collection agencies identifying information. Include the current amount you owe and the amount you'd like to offer to settle the debt.

Some of these factors include the time since your last payment, the total amount owed, whether your account is with the original creditor or a collections agency, and how much you can afford to pay. Typically, you should offer 60% or less of your debt amount to kick off negotiations.

How can I settle my debt without paying? ›

Chapter 7 bankruptcy: This fairly quick legal process can wipe out your unsecured debts through what's called a “discharge.” Chapter 13 bankruptcy: Chapter 13 can also result in a discharge, but typically only after you complete a 3-5 year repayment plan.

Rule 3.740. Collections cases. (a) Definition. "Collections case" means an action for recovery of money owed in a sum stated to be certain that is not more than $25,000, exclusive of interest and attorney fees, arising from a transaction in which property, services, or money was acquired on credit.

If you get a summons notifying you that a debt collector is suing you, don't ignore it. If you do, the collector may be able to get a default judgment against you (that is, the court enters judgment in the collector's favor because you didn't respond to defend yourself) and garnish your wages and bank account.

When you sign a debt settlement agreement, you can cancel it in the first 10 days after you get a written copy. You can cancel it for any reason — even if you simply change your mind.

Get the form called Notice of Motion to Vacate Judgment from the small claims clerk. 2. Fill the form out and file it with the small claims clerk with a filing fee. You must do this within 30 days of the date of mailing that written on the Notice of Entry of Judgment you received from the court.