Should you settle or fight with debt collectors

If you’re being sued by a debt collector and just received the “summons” (your notice to appear in court), you may be tempted to call the company and make a deal or not to go to court at all. People do this because they’re afraid, feel guilty, or think they can protect their money or credit reports if they are “reasonable” with the debt collector. It’s usually a mistake.

Let’s take these “reasons” one at a time.


As you will see, there is little to fear if you stand up for yourself.

The Good

With a little help, you have a good chance to win the lawsuit even if it goes to trial. But whether or not you could actually win the suit, you may be able to raise the debt-collector’s cost of suing you to the point where it gives up long before the case goes to trial anyway. As one person put it:

Today I received in the mail an offer of “Stipulation for dismissal with prejudice,” which basically states the plaintiff will dismiss their complaint if I dismiss my counterclaim. It’s a done deal. Your litigation materials were clear, vital, and necessary tools for me to win…


And if your fear is that the debt collector will suddenly take your bank accounts or garnish your wages, then you should know that they cannot do that without a judgment, which they can only get by formally winning the lawsuit against you and getting a judgment.

The Bad

If you look at the “Petition” (the suit itself), you will see either that it does not seek attorney’s fees at all, or that it seeks about 15% of the overall amount for fees. The debt collector is seeking this amount whether or not you fight, and if you do fight, the amount will hardly ever go up. That’s true with all the other amounts being sought, too. Chances are, the suit is already asking for the most you could lose. Therefore you have little or nothing to lose by fighting.

And since you won’t have to pay the debt collector anything if you win, and you have a good chance of winning if you fight-if you know what you’re doing- then you have everything to win.

The Ugly

The debt collectors love to get people to sign “consent judgments.” That judgment means they could take the money in your bank accounts and start garnishing your wages if you miss a single payment. If you fight and win, there will be no judgment against you, and even if you lose or settle, chances are it won’t happen for many months. And usually the debt collectors will make a better deal with you later on than they will at the beginning. Again, you have little to lose, and much to gain, by fighting.


Many people feel guilty about not paying the bill they’re being sued for if it looks anything like a bill they know they didn’t pay. Most people want to pay their bills. They want to do the “right thing.”

Remember that you never borrowed anything from the company that’s actually suing you, and they never did anything for you. The company you borrowed from sold the debt to debt collectors, usually for a very small fraction of the face amount. Therefore, giving the debt collector money does not help the people you actually borrowed from. And the people you’d be giving your money may or may not actually own the debt. Lots of people have been sued by people who didn’t even own the debt.

Debt collectors are scavengers who feed off the troubles of people having hard times. If you have some extra money, couldn’t you think of a better way to spend it?


You may think that making a deal with the credit card company will help your credit score or make another creditor look on you more kindly. Unfortunately, this is probably not true. By the time the debt goes to the debt collector, most of the damage has already been done to your credit report. Just about the only bad thing left that could happen is a judgment. And most people who settle with the debt collector give it a judgment.


In reality settling is usually the worst thing you could do to your credit history. We think you should fight. But even if you do want to settle, the Debt Defense System will tell you how to do so without harming your credit history more than necessary.