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Debt Relief, Consolidation, or Settlement

Written by Hannah Locklear
Last updated on May 1, 2026

Summary: If you’re overwhelmed by credit card debt, you're not alone and you're not out of options. In this guide, we break down three major strategies for getting out of debt: consolidation, credit counseling, and settlement. Each has trade-offs, and choosing the wrong one can cost you time, money, or worse. With insights from James Lambridis, founder and CEO of DebtMD, this post clarifies your choices so you can move forward with confidence.

James launched DebtMD to simplify the debt relief process. After five years working inside the industry, he realized most people didn’t have the information they needed to make informed choices. His platform connects people to trustworthy partners who offer the solution that fits their situation—not a one-size-fits-all sales pitch.


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Busting the misinformation

There’s a lot of confusion and fear when it comes to debt. If your credit card balances are spiraling, it’s easy to feel like you’ve failed somehow. But in James' experience, credit debt can get overwhelming and out of control very easily, and it's a very common issue in the United States. Thankfully, there are real ways to manage it if you find yourself struggling with getting out of debt.

James' company DebtMD offers a free quiz that asks about your income, debt types, credit score, and financial goals and connects you to a vetted partner that aligns with your needs.

Wherever you're starting from, whether you're juggling five credit card payments or helping a parent navigate retirement debt, getting out starts with understanding your options. For many people, this means choosing between debt consolidation, credit counseling, or debt settlement.

What is debt consolidation?

Debt consolidation means taking out a single loan to pay off multiple debts. It simplifies your monthly payments, ideally gives you a lower interest rate, and helps you avoid missing due dates.

James cautions that debt consolidation only helps and makes sense if you get a better interest rate than what you’re currently paying. If your credit isn’t great, you may not qualify for favorable terms, so you could actually end up paying more.

James emphasizes that, “you should not get a debt consolidation loan unless that new interest rate is lower than what you're paying.”

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Credit card payment estimated at 24.99% APR over 60 months. Settlement estimate based on industry averages. Actual results vary.

What is credit counseling?

Credit counseling usually involves working with a nonprofit agency. They’ll contact your creditors and try to negotiate lower interest rates and fee reductions. Then they set up a structured repayment plan where you make one payment to the agency, and they pay your creditors on your behalf.

This approach won’t save you massive amounts of money, but it provides organization, consistency, and a plan to pay your debts in full without needing to default. It can be especially helpful for people who are struggling to stay on top of payments but haven’t fallen behind yet.

What is debt settlement?

Debt settlement is more aggressive. A company negotiates with your creditors to settle each debt for less than what you owe. But there’s a tradeoff—you’ll need to stop making payments for 3–6 months to trigger negotiations. That means your accounts will go to collections, and your credit score will take a hit.

This option can help people who are already behind and unlikely to catch up. Settlement requires discipline, communication, and often lump-sum payments to settle debts. But for many, it provides a faster way out of overwhelming balances.

“Unfortunately, that option is going to negatively impact your credit score,” James says. “But if your only goal is to just get out of debt in three to four years, you're not really looking to buy a house or a car or anything, it could be a good option.”

What strategy is best for my financial situation?

There’s no single “right” answer, but here are a few guidelines to help you figure out what may be best for you:

  • Your credit is still in decent shape and you have steady income: Debt consolidation could make sense. Just make sure that the new interest rate is lower than what you're currently paying.
  • You’re falling behind but haven’t defaulted yet: Credit counseling can help you stay organized and set a manageable plan, even if the savings aren’t massive.
  • You’re already behind or in collections: Debt settlement may be worth considering. It’ll impact your credit, but it can reduce your total debt burden and help you move forward faster.

Red flags to avoid when choosing a debt relief company

Rule number one—never work with a company that charges upfront fees. James warns, “There are so many debt relief companies out there. If they tell you they're taking fees upfront, run as fast as you can. Make sure whatever company you go with only takes fees after the debt is settled. Otherwise, they have no incentive to do what they say they're going to do.”

He also cautions against companies that:

  • Guarantee results
  • Promise to erase your debt entirely
  • Use high-pressure tactics
  • Are vague about tax implications

“If it sounds too good to be true,” James says, “it probably is.”

DebtMD can help you avoid these pitfalls by connecting you to vetted, reputable partners who put your interests first.

What are the tax implications of settled debt?

Here’s what many settlement companies don’t tell you: forgiven debt over $600 is considered taxable income by the IRS.

That means if you settle a $10,000 debt for $4,000, the $6,000 that was forgiven may be taxed. You’ll likely receive a 1099-C form, and depending on your situation, you may owe additional taxes.

This doesn’t mean settlement is a bad choice, but you should plan for the potential tax hit so you’re not blindsided in April.

You have options

DebtMD was created to help people take action, not just absorb information. Solo was built for the same reason. The goal is clarity, control, and confidence when navigating the messy middle of financial hardship.

If you’re unsure where to start:

  • Visit DebtMD.com to use their Smart Debt Analyzer and connect with vetted debt relief partners.
  • If you’ve been sued for debt, respond with Solo and protect yourself from default judgments.

Getting out of debt isn’t about shame or shortcuts. It’s about choosing the path that actually works for you.

Transcript

Hannah (00:37):

Hello everybody and welcome to the Debt Hotline. My name is Hannah Locklear. I am a part of Team Solo and we help people resolve debts and respond to debt lawsuits. We're going to be talking about some of the world's most popular debt relief options. Our topic specifically is debt relief, consolidation, or settlement, what's best for you. Thank you so much, James for joining. Before we jump into things, I did want to read a little bio about James so that we can know a little bit more about our guest. So James Lambridis is the founder and CEO of DebtMD, which is a platform that connects people who are struggling with debt to trusted, vetted professionals who can help them become debt-free through an easy to use platform. DebtMD empowers users to compare credit counseling, debt consolidation and debt settlement options and helps them make informed decisions with confidence. James launched a DebtMD with a mission to simplify the debt relief process and offer a clear path forward for people overwhelmed by financial stress. His work is grounded in empathy, transparency, and a belief that everyone deserves access to the right support when facing debt. And James, that is a principle that we also believe in at Solo. We want to help people find the best solution if they are dealing and struggling with debt. James, would you like to or fill in any gaps that I might've missed while giving that bio about you?

James Lambridis (03:04):

Yeah, no, I mean, just a quick overview. Before launching DebtMD, I worked in the debt relief industry for five years for another company. So I was the one talking to people who are in debt and there's no better insights to glean than when you actually speak to the customer. In this case, somebody who's looking to pay off debt. And from talking to these people every single day for five years, I found that a lot of them were misinformed. They weren't sure what to do, they didn't know where to turn. So that got me thinking, how could I improve this situation to get them out of debt? And that's where I thought of the idea for debt end date. So happy to be here and thank you for having me.

Hannah (03:56):

Yes, thank you so much for joining again, James. We're excited to have you. So it sounds like before you started DebtMD you were working in the debt relief industry. Can you tell us a little bit more about what that was like?

James Lambridis (04:08):

Yeah, so people who it was predominantly credit card debt people with anywhere from like 10,000, I saw upwards of a hundred thousand in credit card debt who would contact us to see whether to consolidate the debt through a loan. We did credit counseling, debt settlement was another option. So we tailored it to the person's unique financial situation. But back then when I worked for that company, it was 99% of the people had credit card balances that they couldn't lost control of.

Hannah (04:51):

And I think that credit card debt, obviously it's a super common way to fund your life in the United States especially, but it's also credit card debt can get overwhelming and out of control very easily. And I also think that's a very common issue in the United States. So yeah, we're really happy to have an expert with lots of many years of experience in this industry, but also in just helping people find debt relief solutions. I was wondering if you could give us maybe a quick breakdown given your experience on the different debt relief solutions, which are like credit counseling, debt consolidation and debt settlement. Do you think you could briefly explain the difference between those three and yeah, just give us some quick definitions again of credit debt consolidation and debt settlement.

James Lambridis (05:43):

Sure. So I'll start. Debt consolidation is the one, most people just go to that term first. So it refers to a loan where say you have five, six credit cards, you're going to consolidate them into one new loan and instead of five payments, you're going to have the one loan payment. And the only instance where that makes sense is if you're able to get a lower interest rate on the new loan than what you're paying on the five credit cards, which credit cards can be like 25 to 30% interest, which it's almost impossible to pay it off with interest rates that high, but a lot of people will just get the loan anyway. They think it's the right thing to do, which I'm probably jumping the gun here, but you should not get a debt consolidation loan unless that new interest rate is lower than what you're paying.

Then you have credit counseling where these are nonprofit agencies who they're going to contact each individual creditor. Once again, most of the time it's credit cards. They're going to try and negotiate your interest rates down and they'll charge you a small monthly management fee for their debt management plan. That's what they call it. In this case, you're not going to save a crazy amount of money, but they will give you a timeline, whatever, 3, 4, 5 years where you'll have the debt pay it off. So they'll work with your creditors. You'll have one payment once again, and they'll disperse it out to each creditor. And most of the time you are going to have to refrain from using those credit cards, but that's a little about credit counseling. And then lastly, debt settlement is where you're going to have a company negotiate your balances on your behalf. In this case, you are going to have to default three to six months on your payments. It's going to go into collections. And at that point they can offer lump sum settlements to each creditor. And unfortunately that option is going to negatively impact your credit score. But if your only goal is to just get out of debt in three to four years, you're not really looking to buy a house or a car or anything. It could be a good option.

Hannah (08:21):

How does DebtMD connect people with these debt solutions? Can you tell us exactly how it works?

James Lambridis (08:28):

So on our site we have what's called our smart debt analyzer. It asks the user questions about their types of debt, total debt, what their main goals are and things like that. And then based off the answers to those questions, we connect them to the relevant company or companies who can best assist them. So if they just check student loans, we have student loan refinancing credit cards, obviously we would direct them to credit counseling or debt settlement or a loan. So it just depends upon their unique situation.

Hannah (09:07):

So you'll basically interview users online to figure out where they're at with their debt situation? Correct. What type of debt they owe, how, how far into default they are, and then based on their responses, you connect them with the best options and services.

James Lambridis (09:25):

Correct.

Hannah (09:26):

That's awesome. Well, I love that. And people can find your services@www.debtmd.com.

James Lambridis (09:34):

That’s right. Got it. Yep.

Hannah (09:36):

Perfect. Well, with that being said, it looks like we've already got some questions coming in and some people have submitted questions beforehand to the Debt Hotline. For anybody watching, if you have questions, you can also call up into the Debt Hotline. You can submit a question. We will respond to these questions at Solo, at Team Solo every single week. The Debt Hotline phone number is zero one six one three eight one eight one. So again, if you have any questions specifically about debt or figuring out your finances, you can call in and we have experts help respond to those questions weekly. So we have one for you, James. It's from Value Capital Funding. It says we help business owners with MCA, which stands for Merchant Cash Advance Debts, which are horrible debts. They say almost like payday loans for people, but for the business instead. Do you see a lot of people who have this type of business debt?

James Lambridis (10:36):

So my DebtMD only deals with individuals and consumers. That said, I do see a lot of companies sprouting up who do MCA business debt. So if there are companies doing it, I don't know for sure, but I am going to connect the dots here and say that it's a big, there's a lot of instances like what you're talking about with business debt. But like I said, we only do consumer individuals, but to answer your question, I think it's a yes.

Hannah (11:12):

Gotcha. So I did want to weigh in also from the Team Solo side and say that we have a platform called SoloSettle. It's a settlement negotiation platform. So it's not like a traditional debt settlement company where you're going to default on your payments and then save up money and then negotiate to try to settle your debt. Rather, we help connect consumers with creditors, collectors and law firms to settle their debts whenever they feel ready to. And we can also help with business debts, specifically those related to merchant cash advance. So if that's something that you're interested in, you can check out our website.

But again, if you're interested in figuring out how to settle your debt without the typical process of having to default and then save up, which can take some time, you can check us out@solosuit.com and then Yeah. But it sounds like as far as the DebtMD side of things goes, you guys are dealing specifically with individual debt, not business debt, correct?

James Lambridis (12:14):

Yes.

Hannah (12:14):

Okay, awesome. Thank you for the clarification. Okay, next up we've got a question from Kendra. In Florida, it says, I have around $38,000 in credit card debt split between five cards. I'm barely making the minimums and it's stressing me out. How do I know if I should go with debt consolidation or just try to settle what would hurt my credit score less?

James Lambridis (12:40):

Yeah, so Kendra, the fact that you're barely making the minimum payments, that's when it's good that you realize you need to do something. So if I don't know what your credit score is and your income, those are variables that are obviously important. If you are able to get a debt consolidation loan with a lower interest rate than what you're paying on your credit cards, you should definitely look into that. If you have an average to poor credit score, I would look into debt settlement because you're going to be able to lower your payment probably by half. So you'll be able to have more cashflow each month and be out of debt in three to four years. So like I said, depending on your specific situation first I would try for the loan at a lower interest rate and if not, you look into debt settlement or even credit counseling.

Hannah (13:44):

Perfect. Love that. Let's jump to the next question. This one is from Andre in Ohio. It says my credit score is 5 85 and I owe about $17,000 between personal loans and a couple credit cards. I'm worried about getting scammed. How do I know or how do I make sure that I'm picking a legit debt relief company?

James Lambridis (14:04):

This is a good one because, and I've seen and heard horror stories. The biggest thing I would say there are so many debt relief companies out there is if they tell you they're taking fees upfront, run as fast as you can away. So you could do a Google search, there's four or five major ones that a lot of people have heard of, but just make sure whatever company you go with, make sure that they do not take the fees up front and they only take the fees down the line once the debt is settled because if they take the fees upfront, they have no incentive to do what they say they're going to do. So that would be my biggest thing I would look for is the fee structure. Also, if they guarantee anything, also run away. If it sounds too good to be true, it probably is.

Hannah (15:06):

Yeah. I want to second what you're saying, James, about the fee structure. Most debt relief services will not collect a fee upfront. They're going to guarantee that you find some sort of debt relief or debt resolution before they charge you anything. So if they're trying to get you to pay right now, you should be very cautious about working with them. And also use tools like DebtMD.com that can connect you with legitimate resources, legitimate services to resolve your debt and make sure you're not getting scammed. Great advice. Alright, let's see. We've got, our next question is from Tiffany in California it says I'm working two jobs and still falling behind. I've heard of credit counseling, but I don't fully get what they do. How is it different from consolidation or settlement?

James Lambridis (15:56):

Yep, so consolidation, once again, it's such a broad term, it's just you're lumping, consolidating all your debt payments into one payment with all these options. But credit counseling specifically you're going to work with, these are usually smaller. They are considered nonprofit agencies. They're going to contact each of your creditors, each credit card, they'll say you're paying 25% interest, maybe they'll be able to lower it.

They'll be able to lower it to 15%. So not the crazy, not the most savings, but it does help. They're going to charge a small management fee like $50 a month or something like that. You're going to make the one payment, they'll handle the payments to each creditor and you'll be able to have it paid off in usually like four or five years. So that's credit counseling in a nutshell.

Hannah (17:02):

Perfect. Yeah, and again, I just want to reiterate debt settlement, the typical process for debt settlement is usually you will default on your payments so that you can take what you might normally pay for that payment and save it, put it into a fund, like an escrow account and save up and you go several months without paying and then you offer to settle the debt for a percentage of the original amount that you owed and you use your savings to pay that off. That's a good option for some people. But at SoloSettle, we're offering another option. If you already have the funds to settle or you don't want to have to default more and you want to just try to figure out a new payment plan upfront without spending all that time waiting to settle, you can use SoloSettle, negotiate and settle your debts all online and avoid phone calls waiting on hold for hours and having to go to court even if you've been sued for debt.

We can also help you defend yourself and represent yourself in court with a legal document that can help you respond to the case, avoid default judgment, and then buy yourself time to negotiate and settle the debt outside of the court setting because most people don't really want to spend their afternoon in the courthouse, right? It's probably best to try to resolve it outside of that process. So again, wanted to reiterate that while the typical debt settlement route does look like it could take months and months to come to fruition with solo settle, you can settle in as little as we've seen people settle debt in as little as two days on our platform. Alrighty, next question is from Mark in Texas. This one says, my parents are retired and got into about $40,000 in debt helping my sister. I want to help them figure this out. Can older adults qualify for debt consolidation even if they're on a fixed income?

James Lambridis (19:04):

So if you're talking a debt consolidation loan on fixed income, that might be a little difficult because they are going to look at the debt to income ratio along with credit score. But for debt settlement or credit counseling, that might be a good option because fixed income, obviously, I don't want to say it's fixed, but it is fixed. And if you're looking for the lowest possible monthly payment, then that settlement or credit counseling I think would be the way to go. But to answer your question, yes, older people, fixed income, social security pension, whatever it is, that settlement and credit counseling are good options for those people.

Hannah (19:55):

Perfect. That's great to know. Are there any, I guess, reasons that someone would be denied a debt consolidation loan according to your understanding, James?

James Lambridis (20:06):

Yeah, so I mean it comes down to the credit score honestly, because we do debt. MD works with a couple of the big loan companies and some of 'em want over a 700, but then you do get some who are a little more flexible, like a 6 26 50. But like I said, there's no point. Say you are in that six 20 range, if you are approved, they're going to offer you a loan at like 30%. So at that point, there's no point in, you're not doing anything, you're just moving the debt from five credit cards to one loan and you're in the same situation. So that's why I can't stress it enough. If you're not lowering your interest rate and or your monthly payment, there's really, it doesn't benefit you.

Hannah (21:01):

So James, a follow up question on that, do you think that it would maybe make it a little bit easier to manage though, even if the interest rate that is true.

James Lambridis (21:10):

That if you're looking for convenience and you want to simplify instead of which card is due when? That's a good point, then yeah, if you're the same interest rate, then go ahead and do it. If your goal is simplifying, and I will say also with a loan, since it's not revolving credit, that goes up and down, at least in four years, this loan will be paid off. So there is another benefit there, but most people want to save money at least a little bit. So there's that.

Hannah (21:49):

No, I think that's super duper helpful to just be warned that it's really only going to be worth it if the interest rate is slower. Alright, we've got one more question. This one is from Devon in Nevada, it says, what happens if I settle a debt and then the IRS considers the forgiven amount as taxable income? No one warned me about that before.

James Lambridis (22:15):

So first, a lot of debt settlement companies will gloss over this because they want you to sign up and I'm not a CPA, I'm not an accountant, but what I can say is that you can be liable for the tax for taxes on the forgiven debt. So if, excuse me, if you originally owed say 40 and you settled for 20, you are liable for taxes on that $20,000 difference. So that's something where, well, the answer is yes, you're going to have to pay taxes or report it on your taxes, but you should consult with a tax professional A CPA and they'll be able to tell you exactly if and how much you owe because of that.

Hannah (23:09):

Yeah, and I just want to reiterate, I think for all debts that are settled, any forgiven debt will be reported to the IRS and it will be considered taxable income. So that is something to consider when negotiating settlement. There's a certain form, I forget the name of the form, but yes, you're right. Yes. And just be prepared to pay that when tax season rolls around the next year.

James Lambridis (23:31):

Yep.

Hannah (23:32):

Okay, next question is from Sam in Washington, it says, I had a $9,000 debt from an old credit card that's now with a collector. They offered me a 30% discount if I paid off in one lump sum, should I take it or try negotiating more through a settlement company?

James Lambridis (23:49):

So for a $9,000 debt, I personally would negotiate directly with them because remember, the debt settlement company is going to take their fee too. That said, I would, this is where you got to play hardball. If they're offering you a 30% discount, assuming you have money lying around that you can pay this off in one shot, I would offer 50% and maybe you meet in the middle at 40. So to answer the question though, if they're already offering you a settlement, do it on your own because once again, the debt settlement company, they charge 2020 5% of the debt the fee. So I would do it on my own for sure.

Hannah (24:39):

Yeah, I would agree with that. And I would also add though, if they've already offered you a 30% discount, that's pretty fair. It's not an uncommon practice for them to offer somewhere in that range. In fact, 30% is fairly decent. It's a fairly decent offer I would say, based on my experience. But there is a chance that you could probably get them to go a little lower depending on your hardship, depending on your situation. So if you could just be upfront and tell them, this is where I'm at, this is how much I can realistically afford, they may be able to budge a little more, but if you're already at the point where they're offering you this big of a discount, I agree with James, I don't think it would be super worth it to hire another debt settlement company to try to save even more because you're going to end up paying the settlement company and it might cancel out what you would save. Exactly.

James Lambridis (25:35):

Yep.

Hannah (25:36):

Cool. This question is from Cho. It says, thanks for the q and a. I have a case that is ordered to a DR, which stands for alternative dispute resolution with the plaintiff. I reached out to the plaintiff to see if we can settle. What if the plaintiff does not respond, how should I proceed? So I have a little thought on that, Cho, if you've been sued for debt and your case is getting moved to alternative dispute resolution, well first of all, that's probably a good sign. You might be able to avoid the lengthy court process if you're able to go to a DR and try to negotiate the debt there. However, if you've been sued and there is a lawsuit on the table, it might not be the best time to be reaching out directly to the plaintiff. You'd probably need to contact their lawyer to try to settle before the case moves forward.

So if you're trying to negotiate a debt and you're in the middle of a lawsuit, it's usually best to just contact the lawyer directly to negotiate and try to settle outside of the court process. So settle can help you do that. We can connect you with law firms and lawyers to help you negotiate all online before your court date and settle the debt beforehand. But yeah, just be careful to be sure that you're reaching out to the right person who is in charge of the case to get it settled, especially if it's in the legal process already. Do you have any thoughts on this question or anything to add? James?

James Lambridis (27:07):

I'm glad you took this one because this is outside of my realm.

Hannah (27:14):

Perfect. Well yeah. And then lastly, I just would like to reiterate that if you are being sued for a debt, you can use Solo to respond to the lawsuit and we'll help you file your response with the courts and serve the opposing attorney and we can help you avoid a default judgment that way. Just go to solosuit.com to learn more and see what other options you have to negotiate and settle the debt outside of court with the help of SoloSettle. Okay, this question is from Isabelle in New Jersey. It says, I've been trying to DIY, my debt payoff, but it's taking me forever. I have good income now, but not great credit. Is there an option where I can consolidate without super high interest?

James Lambridis (27:58):

Yep. So I'm glad this person mentioned about DIY, doing it themselves. The first thing I would do, and if it means you really need to cut back your spending, try to do it yourself first. Once again, it's difficult, especially with the prices where they are these days, groceries and everything. So totally understandable if it's hard and you can't, but I'm glad that that's a good thing they mentioned try to do it themselves. That said, if you don't find yourself making headway, making progress, and you said good income, not great credit, I would go for the debt consolidation loan first. And if you are able to lower your interest rate, even a couple percentage points, you could save a little bit. You'll have one payment instead of five, six, and at least in 4, 5, 6 years, it's going to be paid off. And another thing they mentioned, good income, a loan, you could always prepay it. So maybe you want to apply more funds a certain month you get a bonus from work or whatever it may be. That's another good thing with the loan where you can pay it off sooner than the term.

Hannah (29:18):

Perfect. Let's see. We've got another question submitted from Pam in Missouri. Says, I was with another debt consolidation company and I had three debts resolved. I got sued on one and I still have five that have been sent to collections. What can or should I do? So it sounds like there are a lot of debt accounts involved. You've already resolved three with a debt consolidation company, but you've been sued for one, and then five others are in collections.

James Lambridis (29:45):

Yeah, so signing up for, I'm assuming she means debt settlement. All your credit cards that you enrolled into the program, they're all going to go to collections because the only way the company can negotiate settlements on your behalf is to have them go delinquent, meaning you haven't paid them in six months and then the creditor has reason incentive to negotiate. So I'm sure you're getting legal notices, summons in the mail, which can be scary, but that's normal. Just keep that in mind. Then another thing, even though I don't want to make light of the people in debt, it's not a crime to owe money. If it were, we'd all be behind bars. We all owe money to a car, a mortgage, whatever. So just know that the legal notices that you're getting in the mail, all they want is money, the settlement. So I hope that eases you at least a little bit.

Hannah (30:53):

I love that it's not a crime to owe money. If it were, we'd all be in jail. So I also think there's a lot of shame oftentimes surrounding the topic of debt. You don't need to feel ashamed and just know there are resources out there. DebtMD.com, solosuit.com, among many others that can help you find the right solutions to help you resolve your debts. Let's see. We've got time for maybe one more question. This one is from as summa in Georgia and it says, I have a debt hearing. How can I prepare for that? I submitted my responses to the summons and requested evidence, but I did not receive anything. I just want to have this settled. So it sounds like a summa, you're being sued for the debt and you're wondering how to prepare for your hearing. So a couple things you can do, and I'm not an attorney, so this is not considered legal advice just based on my experience and having worked with people dealing with debt lawsuits for the past five years.

I would say that the number one thing you can do to prepare is obviously file your answer. It sounds like you already did that. That's going to be the number one step. If you've been sued for a lawsuit, file your answer that will block a default judgment. It'll buy you time to figure out your next steps. Then if you're trying to avoid going to court and you just want to get things settled, you can reach out to the law firm and try to negotiate to settle the debt for less. You could offer maybe somewhere between 40 to 60% of the original debt amount, see if they would take it. If you don't have the funds to do that kind of a lump sum payment, you can also talk to the lawyer and see what your options would be for setting up a payment plan. They might even accept settling for less and then putting that on a payment plan itself.

So you're only having to end up pay maybe 75% of the original amount and you can set it up on a payment plan. Many law firms will work with you to help set that up, and many creditors and collectors will also accept that type of a settlement. Depending on, again, your circumstances. If you're facing financial hardship, like communicate that to the law firm. Don't be afraid to tell them exactly what you're going through and the reason why you fell behind on your payments, because this could actually end up helping you have more leverage to negotiate and settle for less. So yeah, just be honest with your situation and try to settle before your court date. As far as preparing for your court hearing goes, I would say that you're going to want to collect as much documentation and written evidence as possible to help with your case. So for example, if your case is passed the statute of limitations, find documentation that will help you prove that you can bring credit card statements, documentation, anything that you have that will help strengthen your side of the case when you attend court. If you don't have any sort of documentation or evidence, it might be a little tricky to fight the case in court. Again, that's why negotiating before your court date can be a really great option and in many cases, the best and ideal outcome. Any thoughts from your side? James?

James Lambridis (33:58):

That was a great answer, but I'll just say, I'm not going to repeat the quote about owing money or we'd all be in jail, but honestly, when you get these lawyers, it can be scary, but in the end, they just want to recoup as much as they can. Just keep that in mind. So if you're upfront, like Hannah said, you tell them you're in not the best financial situation, they will work with you because they, they'd rather get something rather than nothing. So yeah, respond, show up, do what you need to do. And like Hannah said, they'll even put you on a payment plan sometimes instead of paying, you could pay whatever it is, a couple thousand over six months instead of upfront. So they'll work with you as long as you're transparent and honest.

Hannah (34:53):

Yeah, and I think that the biggest key to debt resolution in most cases is transparency and open

communication. We often paint debt collectors out to be the villains or the bad guys. There is the occasional rogue debt collector that might be super aggressive and maybe even harass you, which is against the law. However, most debt collectors are trained to be compliant, to follow the law, to treat people with respect when collecting debts, and they will work with you if you are honest and open about your situation and can show them the real reason why you're unable to pay the debt. So anyways, wanted to say a huge thank you to everybody watching everyone who submitted your questions. We really appreciate it and we really enjoy responding to these questions every week on the Debt Hotline. James, thank you so much for joining and telling us a little bit about DebtMD.

Again, for anyone interested in exploring their debt relief options, debt md.com can connect you with the right professionals, services and organizations to help you find the best solution for your particular debt situation. And if you've been sued for debt, you can use solosuit.com to respond to the lawsuit and negotiate and settle the debt outside of court and make the whole process a little faster than the typical debt settlement company might be able to help you with. And then lastly, again, just want to invite anyone watching or listening to submit your questions to the Debt Hotline. We respond to these weekly, and you can call us at (801) 613-8181 and leave a voicemail with your questions and we will respond twice a week. And then one other thing I did also want to say is that we are actually hosting a giveaway at Solo right now, and it ends this week.

You can actually go and enter for a chance to win $4,700 to pay off your debt. We're giving away $4,700 in cash to help people who are struggling with debt pay off their debt and get a financial reset. The reason we picked $4,700 is because that's the average amount that people get sued for on Solo's platform. So we wanted to kind of give back to our users and people who are listening at Solo. You can go ahead and enter at solosuit.com/giveaway. The giveaway ends Thursday is the last day to enter. So we are just trying to give back in away and celebrate the 4th of July this month actually with the in debt ending stay giveaway. That's what we are calling it. So yeah, but that being said, thank you James for joining. Any last words on your end?

James Lambridis (37:32):

Well, first off, thanks for having me. And yeah, I guess the last thing is just know if you are experiencing a financial hardship. There's light at the end of the tunnel, so whether it's doing it yourself where you really need to squeeze and minimize your expenses for a couple years, or the other resources, like Hannah said, Solo sounds like an amazing service. You have Debt md, you can debt consolidation, credit counseling, there are resources out there. Just make sure you do your research and be confident when you're making that decision.

Hannah (38:14):

Love that. Thanks again, James. Thanks everyone for tuning into the Debt Hotline. Good luck with finding your best debt resolution options and know that Solo’s here rooting for you and so is Debt md. Thanks so much everyone.

Disclaimer: The information presented in this podcast is intended strictly for general informational purposes and should not be construed as legal, financial, or investment advice. Solo and its hosts are not licensed attorneys, financial advisors, or other certified professionals. While select guests may hold active professional licenses, their contributions are purely for educational thematic discussion. They're not delivering professional or personalized advice. Solo is not a law firm, does not offer legal representation and must not be relied upon as a substitute for professional legal counsel. It is also not engaged in debt, settlement, credit repair, or financial counseling services. Solo provides self-directed software tools designed to support users in navigating their own legal and financial situations. Participation in this podcast is not establish an attorney-client relationship. Listeners are encouraged to consult with attorneys or licensed professionals for guidance specific to their circumstances. The opinions expressed by podcast participants are their own and do not necessarily reflect the views or official positions of SoloSuit Inc. DBA Solo or any affiliated organizations.


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