Settling the lawsuit on your own (without hiring a lawyer) can often be a good option when you are sued by a debt collector in Alabama.
By way of reminder, the five options you have when sued by a debt buyer (such as LVNV, Midland, Portfolio, etc) are:
1. Bankruptcy 2. Fight the case on your own 3. Settle the case on your own 4. Hire a lawyer to fight the case 5. Hire a lawyer to settle the case
Each option has advantages and disadvantages (particularly bankruptcy which we rarely recommend).
When looking at settling the case on your own (also called being “pro se”), the main advantage is there is no lawyer fee. So you save money. And you control the case — if you pay the money agreed to, the case is over.
The main disadvantage is you don’t have a lawyer so you are on your own in negotiating with the debt collector and in signing the paperwork settling the case. You don’t spend money but you will need to spend time to prepare yourself. Also, the account will normally stay on your credit report and you will likely get a 1099 for debt forgiveness the following January after settling the debt.
Normally you will be looking at paying about 50% of the amount sued for in a lump sum. Occasionally less and sometimes more but 50% is a good rule of thumb for a lump sum.
Or you can pay the whole amount over time — usually 1-3 years.
We’ll be glad to help you think through your options.
If you have questions about your options when sued in Alabama, please feel free to get in touch with us by calling us at 205-879-2447 or contacting us through our website AlabamaConsumer.com.
John G. Watts Watts & Herring, LLC Birmingham, Alabama