If you're overwhelmed with debt, there's still hope. Our automated software will help you resolve your debt and move forward.

Reply to a lawsuitSettle your debt

How to Respond to a Debt Collection Letter

Written by Hannah Locklear
Last updated on May 21, 2026

Summary: Debt collection letters can feel intimidating, but you have more power than you think. Whether you plan to dispute the debt, settle it, or prepare for a lawsuit, knowing your rights and taking the right steps early can make all the difference. In this blog, attorney Greg Anjewierden, who spent years working for collectors before switching sides, shares actionable tips to help you protect your finances and respond with confidence.

SoloSettle
4.7 (635)

Settle your debt for a fraction of what you owe

SoloSettle negotiates directly with creditors — no lawyers, no fees upfront.

$2.5B+
Protected
~40%
Avg. Savings
3 min
To Start

"Well worth it. I could not have done this without assistance."

J
Jerry S. Verified
Make an Offer Now

No credit card required · Takes 3 minutes

Step 1: Don’t panic, but don’t ignore debt collectors either

If you’ve received a debt collection letter in the mail, you’re not alone. Millions of Americans receive these letters every year. But before you panic or pay, it’s important to understand what the letter actually means.

In most cases, a collection letter is not a legal demand. You are not obligated to respond or pay unless the collector decides to file a lawsuit. However, ignoring the letter altogether can limit your options.

This is your chance to take action before legal pressure starts. If the debt is invalid, too old to collect, or not yours at all, you can dispute it early and potentially stop it from escalating.

Sued by a debt collector? Respond in 15 minutes or less.

Step 2: Request debt validation

Under the Fair Debt Collection Practices Act (FDCPA), you have the right to request proof of the debt. This is called a debt validation letter, and it’s one of the most powerful tools you have.

Sending a validation request forces the collector to prove:

  • That you owed the original debt
  • That they now legally own it or have the right to collect on it

Collectors must pause collection activity until they provide this information. If they can’t prove ownership, they must stop contacting you about the debt.

Savings Calculator

How much could you save each month?

Your total debt
$10,000
$3,000 $50,000
Credit card payments
$287
/month
at 24.99% APR
for 5+ years
With SoloSettle
$172
/month
settle for less
resolve in months
You save $115 /month
Make an Offer Now

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

Step 3: Be careful what you say (and don’t admit to the debt)

If you contact the collector, by phone or in writing, be extremely cautious. Saying the wrong thing can reset the statute of limitations or limit your legal defenses later on.

Avoid saying:

  • “I owe this debt.”
  • “I can start making payments.”
  • “I just need a few weeks to pay it off.”

Instead, stick to simple language: "I am requesting validation of the debt as allowed under the FDCPA."

Even if you know the debt is yours, never admit it in early communications. You can still negotiate later if needed.

Step 4: Know when you do need to respond legally to a collections letter

If the collector sues you, everything changes. Now you are legally required to respond, usually within 14 to 30 days depending on your state.

Filing an Answer with the court prevents a default judgment, which would allow the creditor to garnish your wages or freeze your bank account. You can use Solo’s state-by-state lawsuit response guides to get started.

Even if you haven’t been served yet, consider filing an Answer early if you’ve received a pre-suit letter or notice of intent to sue.

Step 5: Consider settling your debt (strategically)

Once you’ve validated the debt and ensured the collector has the legal right to pursue it, you can begin negotiating a settlement, but only if that makes sense for your financial situation.

Collectors rarely accept the first offer, so don’t get discouraged. Start low, expect a counteroffer, and be patient.

Some useful strategies:

  • Offer a lump sum for 30% to 50% of the balance
  • Get any deal in writing before you pay
  • Use a pay-for-delete letter to request account removal from your credit report

Need help negotiating? Try SoloSettle, which allows you to communicate with collectors without phone calls or pressure tactics.

Step 6: Special cases—repossession, business debt, and more

The rules can get more complex if your debt involves a repossessed car or a personal guarantee on a business account.

  • Car repossession: You may still owe the deficiency (the balance after the sale), but you can dispute inflated valuations or demand proof of sale price.
  • Business debt with personal guarantee: You may be liable even if the debt was taken out in your business’s name. Validation letters and settlement strategies still apply here.

Each situation is unique, so if your debt falls outside the norm, it may be worth consulting a consumer debt attorney.

You have more power than you think

Debt collection can feel overwhelming, but the law is on your side. You have the right to demand validation, negotiate fairly, and avoid intimidation. Collectors count on fear and silence to win, but you don’t have to play by their rules.

Need legal support or resources? Visit DebtBrief.com to explore Greg's affordable legal services, courses, and document templates.

Ready to take action? Use Solo to respond to lawsuits or SoloSettle to negotiate directly with collectors on your terms.

Transcript

George (00:36):

Alrighty folks, this is George. I am founder of Solo and this is the Debt hotline. On today's show we have Greg Anjewierden. Greg is a licensed and practicing attorney who used to work as a debt collection lawyer collecting unpaid medical debt. As such, Greg knows all the inner workings of the debt collection litigation system and how it can be unfair for people who can't afford a lawyer. Greg is also the founder and CEO of Debt brief, a company that helps people who are sued for debt with consulting, legal representation, forms, courses and other resources. Greg, welcome on the show.

Greg Anjewierden (01:19):

Yeah, thanks for having me. Glad to be here.

George (01:21):

If you guys have any questions, call in. You can call into the debt hotline at 801-613-8181. So if you have a question, if you're dealing with debt of any sort, just go ahead and call into the hotline and we'll make sure that we get your question answered. We also have some questions from people who have written in previously that we're going to be answering as well, and we have some people who have called in and left us a message on our voicemail. So before we get into those particular questions, general question and topic for today is how do you respond to a debt collection letter? Greg, can you go ahead and just give us the breakdown on how to respond to a debt collection letter?

Greg Anjewierden (02:05):

Yeah, well, there's a couple of things that I think are important to note when you get a debt collection letter, and the first is you're not legally obligated to give any response to a debt collector until you are sued. You get a summons and a complaint and then you have to file an answer. So I think one thing is people think, well, I have to respond because I've got this letter. You don't have to necessarily respond to a debt collection letter. Now, there are reasons why you might want to and it might be a good idea. And usually the one thing that you're going to do first is send a debt verification or a debt validation letter and say, Hey, I need you to send me the information that verifies that this debt is actually mine. And I think that's usually a good first step to determining do they have enough information to prove that you owe this debt?

I think the thing that you want to be careful of obviously is at this stage admitting that you owe the debt. Even if you know it's yours, it's probably not a good time yet to admit that you owe this debt to them. So those are kind of the key things that I say is you don't legally, you're not legally obligated to respond to a debt collection letter. Probably a good response is usually going to be a debt verification or debt validation letter. And the most important thing is at this point you don't want to admit that you owe the debt.

George (03:29):

Fantastic. Thanks for giving us that breakdown. So folks, we have a question here from Raquel in Georgia.

Debt Hotline Guest: Raquel (03:40):

Hi, I owe $11,400 with interest is $13,400 and I have been subpoenaed to come to court, but we haven't went to court yet. I'm trying to figure out how I need to handle that and what's the best way so I get the least amount of settlement money if I can come in there, I want to settle before we go to court, what's the best way to go about that? The reason I fell behind on payment meds was I had a leg injury and I was unable to work for a year. I also had a death in the family and I got a cut pay. The interest rates were just going crazy because of the COVID and all that extra stuff and it just became too much. So that's why.

George (04:36):

Raquel, thanks for giving us that context on your debt lawsuit situation. Greg, what's your take here?

Greg Anjewierden (04:43):

Yeah, I mean first of all, she gave some context on the situation. I would say there's no shame in getting into this situation, especially when you have a medical issue like that. I mean, George, I'm sure that you meet a lot of people like I do that just they feel really embarrassed about the situation, but it happens and we know that there's a lot of people that end up in this situation. So first thing I would say is don't feel shame over this. But the second thing that I would say is I think definitely it was a little unclear in the question, is this a small claims thing that doesn't need an answer or not, but find out first are you required to file an answer? And I typically tell people that you want to file an answer to the summons in the complaint before you start negotiating.

In my experience, if you file that answer, the other side knows they're not going to get a default judgment against you and it just gives you the tiniest bit of leverage in your settlement negotiations. Otherwise, if you don't file the answer first using a tool like Solo suit, if you don't file that first, they might think, well, let's just sit on this and wait and see if we can get a default judgment against them. So get the answer filed. Once you do that, I think you want to reach out and you can try and negotiate it. Obviously Solo settle is going to be a really good tool. If you don't feel confident in your abilities to negotiate that settlement yourself, I highly recommend it. And I think the other thing you want to remember is start low in your negotiations because they're probably not going to take your first offer.

So don't stress over, okay, well I owe them 13,000. Is 2000 too low or is 1000 too low? It almost doesn't matter because they're almost certainly not going to take your first offer and you're going to realize pretty quick how far down they're willing to come. Now, I think for a lot of people, they get that first response back and they're like, well, I'm never going to be able to pay the amount that they're willing to take. And what I say to that is there's lots of cases that are difficult to settle at the beginning, but if you're continually working them and trying to reach a settlement, they have a way of working themselves out in the end. So I've helped so many people where they want to settle it right away. So you file the answer, you reach out to negotiate a settlement, the numbers just don't work for you. So keep defending that lawsuit and you never know, 3, 4, 5 weeks, even 3, 4, 5 months down the road, if you're continuing to work that lawsuit, they may come down, things might work themselves out. In that case, maybe you end up in a different financial position. I think time is your friend, so keep working the case until you get a deal done. And don't panic if the deal doesn't get done right away.

George (07:34):

For sure, for sure, for sure. Yeah, that makes a lot of sense. Makes a lot of sense. And I think for somebody who is being sued for a debt, certainly my mind. Yeah, first step is just respond to the lawsuit. The way I honestly think about it is that the complaint and answer couple are really just like a handshake, just like a handshake in the legal space. For some corporations and especially in the legal litigation space, the complaint can honestly just be the initial handshake from a corporation and if somebody sticks out your hand, somebody sticks out their hand to give you a handshake, you just stick your right back out. And that's like filing the response to the complaint. You don't run away from them, you don't hide from the person who's sticking out their hand, you just shake it right back and you say, what's up?

Greg Anjewierden (08:32):

Yeah, I really like that analogy. I think the other thing that's important is don't just go in and admit everything that they're alleging. You can respond to the complaint and say, look, I don't have enough information yet to admit or deny, and that's just fine and that will keep the lawsuit process going. Whereas if you just go in and admit all this stuff, I mean they've won and that's perfectly fine. Lawyers do that in lawsuits every day. They just deny for not enough information. So there's no problem doing that.

George (09:03):

And I think a lot of people, consumers especially misunderstand and think that there needs to be some kind of a communication before the lawsuit, which there really doesn't need to be right. Corporations, especially when it's like corporation to corporation, they can just start with the lawsuit. That can be the first communication. You just get sued.

Greg Anjewierden (09:24):

When I was doing debt collections, I actually took that approach. Sometimes people want to be like, well, let's send them a collection letter and then let's send them to collections. And I was like, man, you really want to get them to pay quickly. Just file the lawsuit with no notice. You're right, they don't have to communicate at all before lawsuits filed.

George (09:44):

And that's the way a lot of debt collection law firms think about this. When if you're getting sued for the debt, that means you probably have a collector who's placed the account with a debt collection law firm and the debt collection law firm will usually see their job as being to sue people and win the lawsuit. That's like their job. Their job isn't to have a nice conversation on the phone. Their job is just to file a lawsuit and try to collect. And so with Solo folks, you can use Solo to connect with the collectors. We focus on having good relationships with collectors as well as consumers, and we really think people want the same thing, which is an ideal settlement as fast as possible in most situations. So that's what we are doing. We have a question from Monica.

Debt Hotline Guest: Monica (10:32):

Hi, this is Monica Tims and I have heard a repo of a vehicle on my report and I was just wondering if y'all could assist me with that and how much my monthly payments would be in order to wipe that off of my credit report and to get my credit score back up.

George (10:58):

All right, there we go. So Monica sounds like she is in a repossession of her vehicle. She's wondering how she can get out of that situation and get her credit score back up. Greg, what do you think?

Greg Anjewierden (11:09):

I'm going to be honest with you, I know you have a lot of guests on your debt hotline here. I'm not the credit repair expert like some of the people you have on.

George (11:20):

Yeah, I'm happy to take the credit part. Well, what about the repo? How does she deal with the repo and if that's a result of a lawsuit?

Greg Anjewierden (11:26):

Yeah, so as far as the repo goes, if they come repo the car, I think the thing to remember is that yeah, they can come take the car, but the value of the car gets credited to the amount that you owe. So as far as when you're fighting the lawsuit, now the lawsuit might not be so much over whether you owe the money, but the fight in the lawsuit might be more over how much you owe. Right now, what the loan company is going to want to do is value that car really low, right? So if you owe, let's say you owe $10,000 and they repo the car and they're going to say, Hey, this car was worth $3,000 so you still owe us seven. What part of what you want to do in that lawsuit is actually argue that the value of the car was more so that ultimately you owe less, right?

And the judge or can make that determination as part of the lawsuit. So you can come into the trial and show your evidence that, hey, I did some research, I looked at Blue Book, I looked at comparables, here's the local classifieds that show the same type of car with similar type of miles where the car was worth $6,000. And you present that evidence and the judge can ultimately determine like, hey, yeah, it looks like the value of the car probably was $6,000, so you only owe four as opposed to seven. So I think when you're dealing with repos, that's going to be a really good strategy is not as much fighting do you owe, although you can still do that. But one of the approaches you really want to take is that that value of the car was actually really high and that needs to be credited to your account.

George (13:08):

Fantastic. Yeah. And folks, Monica, right? You're in this repossession situation, we feel for you it would be ideal if you could keep your car for sure, probably or you need some kind of vehicle probably to get to work. So we'd like you to be able to figure that out. And I think in this position, basically you want to first resolve this lawsuit that you're in or this collection situation that you're in, get that thing resolved. And then next, moving on from there, you want to settle any other debts that you're in. What kind of debts do you have, right? Do you have $5,000 of other debts? Do you have $30,000? What do you have? Try to get those settled at some kind of a discount. Oftentimes creditors are very happy to work with you and give you some kind of a deal to get those things resolved.

And then beyond that then you can really start getting your foundation back in place. You can get your legal foundation in place if you need some kind of legal help. If you have other lawsuits that are outstanding, you want to get those wrapped up. You can make any emergency funds so you can start saving money, put money away for a rainy day, make sure you get at least a thousand dollars of savings. And then once you get that done, once you have that savings done, then you can start looking at the credit score, try to get your credit score up to 800. Right now it's probably in the five hundreds, so just thinking about those milestones, right? Get up to like 600 and then 700, 750, get an eight hundred. And it's largely about making those payments on time. It looks like I have someone calling in. Alright, it like we have William. William, what's up? Tell us about your situation. What are you going through?

Debt Hotline Guest: William (14:55):

Well, my question for you guys is I have been recently receiving some, I guess some correspondence from debt lawyers that I am in the process of being sued by American Express. I have gone to the portal that you normally use to verify information. I did verify that there is a lawsuit in the works. I think they filed it back in June or something like that, but I haven't been served just yet. So my question for you guys is, is there a process to kind of circumvent having to have the inconvenience of being served or have somebody knock at your door to just kind of skip that step and start answering the actual lawsuit or get a copy of the summon somehow without having to be served?

George (15:42):

Happy to help you out with this. Tell us a little bit more about your situation generally. How'd you get into the spot? What's the debt from? Is it a credit card debt or?

Debt Hotline Guest: William (15:49):

Yeah, basically some credit card debt that I had with a business that failed. Unfortunately I lost the business and just have this debt of about, well maybe about $8,000 more or less between a couple of cards that I had with American Express.

George (16:05):

What was the business? What was it doing?

Debt Hotline Guest: William (16:08):

It was a digital marketing company that I ran with a business partner of mine, but basically my business partner unfortunately had some complications with family and so we ended up having to move and we decided just does the business dissolve itself basically. So we were left with all the debt that was on the credit cards and basically we weren't able to pay that and I basically moved on from the business and got into a job now that I'm working with afterwards, but obviously there was still all this debt that was on these credit cards that was left from when the business evolved last year.

George (16:44):

Well you can get out of this position for sure and happy to give you the tips to do so. Did you do a bankruptcy with the business? How did you shut it down?

Debt Hotline Guest: William (16:56):

Basically he was the one that was primarily in the business. I was kind of the secondary partner in it, so he's the one that kind handled all the dissolution of the business or dissolving the business and I kind of let him handle that aspect of that. But I mean apparently as far as it came to the debt, I was still basically under my information, my social security number. It was more like an LLCI guess in a sense. So my information was still with the credit card. So basically I'm still obviously on the hook for the debt that was accrued with my cards.

George (17:31):

During that time. Yeah. Did you guys have an LLC formed?

Debt Hotline Guest: William (17:35):

Yes. Yes, we had an LLC, that's correct, yes

George (17:37):

Okay, great. That's good. Glad that you weren't a sole proprietorship. So that puts you in a better position that you had the LC formed. And then do you know, it sounds like maybe your just kind of let things dissolve on their own without declaring an official bankruptcy.

Debt Hotline Guest: William (17:55):

Is that right? That's what it seems like it's happening. He didn't really go through the steps of bankruptcy or anything like that. I think he just basically let the business dissolve. And I don't know exactly what paperwork he's really filed officially. He said that the business is dissolved and the franchise in Texas has already been canceled or hasn't been renewed. But as far as the actual steps, he hasn't really shown me any paperwork showing where the business has been dissolved through litigation or anything like that. So I'm not sure exactly what a similar is.

George (18:26):

Okay. And so the term here is that you are a personal guarantor, so on most corporate credit cards or corporate loans, especially for smaller businesses, the founder like the owner will become a personal guarantor. And so in addition to your LLC in Texas being on the hook for the loan, you and your partner are most likely on the hook for the loan. That's a pretty common situation, pretty much unavoidable in the early days of a company. Greg, what do you think here? What's the path to resolution do you think, for wood?

Greg Anjewierden (19:07):

Yeah, well first lemme go back. I mean his question was, I found out about this lawsuit, what can I avoid getting served because I haven't gotten served yet? And the answer to that is absolutely, and this is really common in commercial litigation because usually in commercial litigation there's a lot of conversations leading up to lawsuit what's going to happen. And so you just ask them to accept service or you talk to their lawyer and their lawyer just accept service and things. I mean, basically what you can do is you can just go ahead and file your answer and acceptance of service is going to be presumed in that case.

If you're ready to go and you're just like, let's just move this thing forward, go ahead and file your answer. You're obviously not obligated to do that until you are served. However, the other danger that I see once you find out about a lawsuit, I think you're better off just answering anyway, even if they haven't served you. Because what may happen is, okay, you learn about this and you're like, well, they haven't served me yet so I don't have to file an answer. Well, what if they say they served you and they didn't and now they have a default judgment? Now the burden is on you to get that undone. So if you know about the lawsuit, you're ready to engage with it, ready to attack, negotiate, whatever you want to do, I would just go ahead and file your answer right away. That's what I would do with that.

Now as far as the questions about George is talking about, oh, you're the personal guarantor, I don't know, and it sounds like you maybe don't know either the status of this business, but the business still theoretically could be on the hook for this debt as well. And one strategy for resolution might be talking to your business partner, finding out is there any money in the bank account or, I dunno, it depends on what kind of agreement you had with your business partner. There may be an opportunity to, and I don't know your relationship with him if it's good or bad or whatever, but there might be an opportunity to bring him into that too, even though you're the personal guarantor, that's not necessarily going to get you all the way off the hook or mean. There won't be a judgment against you, but there could be offsetting stuff or getting him involved some way that doesn't put all of the burden on you, but that's something that you're going to have to fight out as part of the lawsuit process

Debt Hotline Guest: William (21:34):

As far as getting a copy of the summits to be able to get the answer sheet or how would I be able to get a copy of it if I'm not served? Can I go to the court and get a copy of this or what other options do I have aside from being served? Obviously that's a document I would need to answer through Solo.

Greg Anjewierden (21:50):

Yeah, exactly. So what's happened is the debt collector, whoever has filed the complaint in the court, and usually when something gets filed with the court, like a report goes out to people that have signed up to receive those kind of updates, and then defense lawyers, they get those and they send out advertisements to people that have been sued to try and get their business, and that's most likely what has happened to you. So what you do is you can go to the court and just give them your name and they should be able to give you a copy of what's been filed.

Debt Hotline Guest: William (22:25):

Okay.

George (22:26):

Yep, that's right. Okay. Yep. You can call 'em on the phone. We also have a great link to the list of online listings of cases in Texas as well, so you can go ahead and try to search your business name, your last name in the online listing, and if that doesn't work, you can call into the court. The last thing I'd say here, William, is just that real wealth is in ownership. So with Solo, we want to help you get this thing figured out. Now also, you can continue using Solo and chatting with our AI to continue to build wealth over time and hope that you get back into the game as well. Hopefully this hasn't put you in too bad of a spot. We want to help you continue. And wealth is in ownership, whether it's like you own a law firm, whether you own a marketing company, whether you own stocks that are traded in the stock market, whether you get stock options at the company that you work for, whatever. That's where the wealth really is, so you want to keep on doing that. All right, William, thank you so much for jumping on the call. Next up we have Scott.

Debt Hotline Guest: Scott (23:37):

Hi. Thanks for taking my call, but I've gotten several letters from debt collection agencies trying to settle a debt that I had with a couple of credit cards. So I've seen online sometimes. So how should I, initially I haven't been sued or any of that, how should I initially respond? So a lot of things that I'm reading about is should I send a request for debt validation under the fair debt collection practice agencies asking them to provide me with the amount of debt detailed breakdown of the fees, interest name and originator, and making sure that they actually now own the contractor agreement that bears my signature or any other proof that they actually own it. So I just need to know the first step. Is that a valid response to when I get one of these things for the first time?

George (24:39):

Yeah. Scott, zooming out a little bit, tell us a little bit more about this debt. What's the source of it? How'd you get into this position?

Debt Hotline Guest: Scott (24:47):

So I was in the situation where working for a firm and a partner took seven figures for me from me, and he's in prison now, but that really doesn't help me right now in the fact that I have some obviously financial issues after all this money was taken for me, and so I'm digging myself back out of this hole. So there have been some credit cards that I was not able to keep up with, and so the credit card sold them off for pennies on the dollar obviously to some of these agencies, and now I'm starting to get some of these letters. So that's how I want to be above board and make sure that they actually can verify and that if they don't have the paperwork, do I really need to pay? And so that's my question.

George (25:46):

Sorry, you said that you had a partner that you were working with and he stole money from you, is that what you said?

Debt Hotline Guest: Scott (25:50):

Yeah, 1,000,005. He stole 1.5 million from me. That's a lot of money.

Debt Hotline Guest: Scott (25:58):

Yeah.

George (25:58):

I'm sorry to hear it.

Debt Hotline Guest: Scott (26:00):

Hence the letters.

George (26:03):

Are you going after him for that kind of money? What's the situation here? Is this bank fraud or through on his part of the bargain.

Debt Hotline Guest: Scott (26:13):

Investment, some of all of that. So I'm so far behind in the debt collection, so he also embezzled client money, so there are multiple lawsuits on that. So I'm way at the end of that and the fact that the firm is now bankrupt and he's in prison, very little hope for that money for me.

George (26:40):

Sorry, I've had to go through this.

Debt Hotline Guest: Scott (26:43):

Yeah, me too.

George (26:43):

Partners in prison.

Debt Hotline Guest: Scott (26:45):

Yeah.

George (26:47):

Was this a law firm or marketing firm kind of thing? Debt Hotline Guest: Scott (26:49): Investment firm.

George (26:50):

Investment firm. I see. Okay.

Greg Anjewierden (26:53):

Yeah. So first thing I would say is, this wasn't really your question, but based on what you said, I've helped people before who have had money embezzled out of their company, and what we typically do is we engage with the criminal process and try and get the prosecutor and the judge to include with their ruling a restitution order now so they're ordered to pay back. I mean, I get where you're at though someone that's in jail and has squandered all that money, doesn't have money. The other thing that I would do is file your own lawsuit and get the judgment. The thing about judgments is they can last a really long time. This isn't going to solve your problem immediately, but I mean judgments can last decades and can be renewed depending on the state you're in and you just never know. He gets out and starts making money, you can start getting a little of it back. Now, I guess another thing that I thought of while listening to you, but to answer your question, okay, so you're getting all these collection letters. Now, what's an appropriate response to that? And I think what you want to do is remember, first of all, legally you're not obligated to do anything until they actually sue you. Okay?

But I think a good response is usually to send a debt validation or debt verification letter. Now I think you mentioned some specific things that you want to know from them. You can put those into your letter and request them. Understand that the law is not exactly clear on what debt validation or debt verification is. So you may get answers to your specific questions, but you may not.

Debt Hotline Guest: Scott (28:37):

Okay?

Greg Anjewierden (28:39):

They may give you some of the information, they may not have all the information that you're asking for, which frankly is probably a good thing for you if that's the case. So a lot of times people will send that and all they get back is like a ledger or a single page statement. If it's a credit card, it'll be like a single page statement that just says pass due balance. And so then they're like, well, they haven't really verified anything and the law's not exactly clear on whether that's valid verification or not. So then if you look at that and you say, look, I don't really think they have the information that they're required to have, then what you want to do is just do nothing, wait and see if they sue you. If they do sue you, then as part of that lawsuit process, you can make much more specific requests for information.

These are called interrogatories and requests for production of documents. And then you can ask them for specific documents. You can ask them specific questions, but that's not something they're required to answer until they've filed the lawsuit against you. So what I've done when I've, I've had people send these kinds of letters is first thing I do, I send a debt verification letter. I wait and see back what I get. If I'm looking at this going, it's pretty clear this is my debt, then I either pay it if I can or I engage in settlement negotiations. If I look at it and I say, I don't think this is good enough, I'm going to wait for them to sue me, ask for more specific information in the lawsuit. If they don't have it, then I think I got a pretty good shot at beating them in court.

Debt Hotline Guest: Scott (30:11):

So that's super helpful. So I know they're not just buying my debt, they're probably buying thousands at a time. So they buy my debt for pennies on the dollar, and let's say that that used to be my credit card, but they don't have the actual verification that they own the debt outright. They're missing all this paperwork even though it's really my debt, am I legally required to pay that debt or work something out with them if they don't actually have the required documents?

Greg Anjewierden (30:50):

So they've got to prove if they're like a third party debt buyer or a junk debt buyer,

Debt Hotline Guest: Scott (30:53):

Yes, that's it. That's right.

Greg Anjewierden (30:54):

They've got to prove two things. They've got to prove, number one that you owed the original debt, but they've also got to prove number two that they own it.

Debt Hotline Guest: Scott (31:01):

That's right.

Greg Anjewierden (31:02):

Yeah. So they might be able to prove the first point but not the second point. I think that's kind of what you're getting at and what they need to prove that is there's got to be some kind of purchase agreement. It might not be called a purchase agreement, it might be called something else, but it's got to show that your original creditor sold the debt to the third party debt buyer. And what I see a lot is that they will just purchase a whole bunch and it's not specifically listed out. So if you're going to defend this, what you're specifically looking for is some kind of agreement that shows that your specific debt was purchased, so is your name on it, is your account number on it? And if not, then your argument's going to be, I don't think that they've purchased my debt.

Debt Hotline Guest: Scott (31:49):

So I think I might've even gotten this from Solo's website, but on this template letter under the fair debt collection practices, the last two paragraphs was like, please be advised that until you provide the information requesting, I'm exercising my right to request that you cease all collection activities related to this account. If you are unable to provide the request documentation, I request that you stop all collection in cease reporting this account to any credit bureaus. Now, I don't know if that's enforceable or anything or just language.

George (32:24):

Scott, I want to jump in with a couple kind of broader questions. We determined this is from kind of stemming from an embezzlement situation from your partner, which is very unfortunate. What kind of debt are we talking about here? What kind of amount are we about that people are coming after you for? Is it like credit card debt or a business card?

Debt Hotline Guest: Scott (32:42):

Yeah, it's probably three cards, maybe 20, 25. But I used to have an 8 0 5 credit score, and so this really took me into a tailspin.

George (33:00):

And so these are credit cards that you were a personal guarantor on. You're the personal guarantor on them?

Debt Hotline Guest: Scott (33:05):

Yes, they were.

George (33:08):

They're business cards, right? They were cards for the business, not for you personal?

Debt Hotline Guest: Scott (33:11):

No, they were personal. Personal cards.

George (33:13):

Okay. Personal cards

Debt Hotline Guest: Scott (33:14):

Okay. I wish they were business cards. I could have just let him have it.

George (33:19):

Alight. And so basically you put expenses related to this whole criminal situation onto these cards, right?

Debt Hotline Guest: Scott (33:26):

Not necessarily, no. They were mostly personal expenses not related to business because any business expenses, I had a business card.

George (33:39):

I mean, correct me if I'm wrong, but it kind of sounds like the debt's stemming from this tumultuous time with your business.

Debt Hotline Guest: Scott (33:46):

Well, it's stemming from the fact that I lost so much money and then quit the firm with my very high salary and bonus structure.

George (34:00):

Right, okay. Right. Yeah. So Solo's stance on this, right? So what we've found is that oftentimes just moving towards settlement on debts that are owed is usually the best path. So if somebody comes to us and they say, I am recognized this debt, I'm familiar with it, then what we educate people on is that usually just trying to get some kind of a settlement on the debt and going to be the best path. And what we find for people who aren't represented by a lawyer is that just moving towards settlement will be the best option. So if they're being sued, file a response. If they're not being sued, then just moving towards making an offer through SoloSettle to the collector. So use this way to connect with the collector is just on our SoloSettle platform and work with.

Debt Hotline Guest: Scott (34:48):

I've looked at it.

George (34:50):

And so usually just making an offer, skipping a debt verification or debt validation step is usually the best path, mainly because it usually has kind of unexpected consequences for just a consumer going at it themselves where they'll file a debt validation letter with the collector and then the collector puts the account on hold. So then if the consumer calls in, the collector won't answer them, they won't talk to them on the phone and the consumer gets real upset about it, why doesn't the collector ever talk to me? And it's because the consumer filed a debt validation letter. So usually that kind of path works better for people who have an attorney. If somebody comes to us and they're saying like, Hey, this debt, usually the best path is just going to be to try to get it settled and then just try to get a discount on it, just try to get a discount. Oftentimes debts that are pre-law, you can get a settlement of like 50% of the balance. If it's in a lawsuit, maybe it's like 70 to 80% and then just try to move on from there.

Debt Hotline Guest: Scott (35:50):

So obviously they send out a letter like, Hey, if you can pay 90% of this, so how many reiterations of this do I need to go through before I get to 50%? Or obviously the other option is just to let you guys handle it.

George (36:10):

A lot of theories there, a lot of theories. One is to go back and forth and get into this positional based bargaining. With Solo settle, what we're trying to do is we maintain good relationships with collectors as well as we maintain trusted consumers. So we try to give people, give the parties the information that's needed just to get to an ideal settlement as fast as possible. So I think really it's just about helping the collector understand your ability or inability to pay the debt and then get a settlement at that rate. Scott, thanks for calling in. We've got to hop on with the next person and thanks. Okay.

Debt Hotline Guest: Scott (36:47):

Thanks so much guys. I really appreciate the feedback. Thanks. Appreciate it. Good luck.

George (36:51):

Okay folks, we've been saving something special for the end of our show. We are announcing the winner of our giveaway. Before we get into that, Greg, thanks so much for coming onto the show.

Greg Anjewierden (37:02):

Hey, thank you for having me. Look forward to it again next time.

George (37:06):

Alrighty folks. So $4,700 is the average amount Solo users owe in debt. So in July, we wanted to celebrate Financial Freedom by hosting another giveaway to help someone pay off $4,700 towards their debt. And congrats to Shawn for being selected as a winner of the giveaway. Shawn, here you're live. How's it going?

Debt Hotline Guest: Shawn (37:30):
Good, good, George, how are you? Thank you.

George (37:33):

Doing great. Thanks so much for coming on to the debt hotline, very glad to have you on. So folks, Shawn is joining us to share his story and a few words about winning the giveaway. Shawn, what went through your mind when you were notified that you won the giveaway?

Debt Hotline Guest: Shawn (37:50):

My first reaction was, no, it's not real. I thought it was a scam. And actually I Googled Solo, I Googled, you went on LinkedIn and realized, no, it's not a scam, it wasn't a mistake. And so from there then it was just kind of a sigh of relief to think that I'd actually won this giveaway and that maybe it might give me a little peace of mind, make things a little bit more manageable.

George (38:18):

Shawn, that's great. Glad to hear. Miracles do happen. You do win from time to time, free money. So here we are. We're giving you money to help you get back on the right track. The last time I won something I think was for free, I think I won a Beanie Baby in the fourth grade is a potato chip Beanie Baby. I dunno if I've won anything since, at least in a giveaway sense, maybe I should have kept that giveaway. I think I gave it away to someone in my class. I think if it was a Beanie Baby, maybe I should have kept it.

Debt Hotline Guest: Shawn (38:52):

That is a good investment.

George (38:55):

It could have been a great investment indeed. Okay, Shawn, so tell us about your current debt situation and how much this $4,700 will help.

Debt Hotline Guest: Shawn (39:05):

So I just, last week in fact turned 57 and I had a career. Thank you. I had a career, I had a career in marketing, and a couple years ago I got laid off and I think a lot of people can relate to that and it's been harder than I thought it was going to be to find work again. And you and I had even spoken about AI and how that's impacting things and I don't even know or am aware of how it might be impacting things in my area and with my job search, but I do know that I feel the ageism, if I was an employer, a 57-year-old versus a 27-year-old is not a difficult decision to make unless I was just the most highly qualified person in the state. And so yeah, it gets to be this huge juggling act, right? You've got all the bills that you need to pay and then you're trying to think about savings, you're trying to think about retirement, and you're also trying to think about this credit card debt. And mine's over 6 6200 now. So yeah, that 4,700 is going to come in handy.

George (40:23):

So you have about $6,200 in debt? And we're Solo sending me a 4,700, so that's going to wipe out most of it.

Debt Hotline Guest: Shawn (40:30):
Yeah.

George (40:31):

That's great. What's your plan for tact and the rest of it?

Debt Hotline Guest: Shawn (40:36):

Well, the first thing is, yeah, I just put it towards the credit card first thing and not think about it. I think it's really easy too to be like, oh, well scratch a little bit off of that and then only pay this much. But the $4700 going to go directly to the credit card.

George (40:53):

Do you have multiple cards or just one?

Debt Hotline Guest: Shawn (40:56):

I have probably one of the lucky ones that just has the one.

George (40:59):

And I guess are you delinquent on the payments at this point or just a couple months behind, or have you been making payments?

Debt Hotline Guest: Shawn (41:06):

Yeah, it is getting the minimum payment across the board, but other people probably see this as well. It's like the interest just starts to build and then it becomes an additional bill. You've, you're paying the gas and power in your rent and it's like, oh, and then interest on it becomes my third bill, which yeah, that's frustrating.

George (41:32):

So people settle a lot of debts with collectors. They resolve a lot of debts with people through SoloSettle can make a, usually SoloSettle is usually working with people more in the lawsuit or the pre-law stage, at least in collections. But you can certainly hop on and make an offer to Wells Fargo to wrap up this debt for the $4,700. I think if I were in your position, I would be thinking, okay, I have $6,200 in debt. I have 4,700 available right now. The bank would probably appreciate it if I could just pay 4,700 as a lump sum. All it wants to pay off the full balance. Let's see if they will accept that for the full amount so you can make an offer through. So settle to do that. You can also welcome just to call the bank directly and try to work with somebody to see if they'll accept that payment for the full amount. But then once you make this payment, you really want to be able to act fast to either get some more income, which I know is difficult, but get some more income to try to pay off the remaining 1,500.

And so I think after the show I can have Hannah connect you with our jobs network. So Solo is backed by Y Combinator, which is a good investor, and we're a network of a lot of startups that hire folks with your kind of experience in marketing. So happy to connect you there and see if that can help. Thanks you, sir. If anybody, if anyone's listening and they're looking for marketers, Shawn's your man, connect with him, what would you tell someone else who's in the same boat you were in before winning the giveaway?

Debt Hotline Guest: Shawn (43:15):

I just know I would, oftentimes, I didn't anticipate kind of being in this position. I don't think anybody does, but it, it's really easy to get overwhelmed and kind of freeze up, or at least that's what I do in that situation. And you're staring at the bills and the balances of what you do. For me, the best strategy sometimes is just to walk away from it all and take a break and breathe and come back to it and just not to give up. It is, it's frustrating. And so thanks to you and Solo obviously because kind of two gifts for me. I do get that 4,700, but I think most of us, I'll speak for me, go through that balance sheet of what can I cut 7 99 subscription here, or whatever it is. And then the question of, and then what, and just from discussions with you guys have been great and kind of just being able to see what other tools and resources are out there. So I mean, it sounds really cliche, right? But if I can discover and look at these tools and talk and be able to have those resources then and see why anybody else could.

George (44:29):

That's fantastic. What kind of marketing did you do in the past? What kind of companies were you working for?

Debt Hotline Guest: Shawn (44:35):

My full career was Wells Fargo. You were working for

George (44:39):

Wells Fargo?

Debt Hotline Guest: Shawn (44:39):

I actually worked for Wells Fargo.

George (44:41):

That's a terrible irony.

Debt Hotline Guest: Shawn (44:42):

I know, I know. So based on what you said before, hopefully that's a viable option for them, especially

being a former employee.

George (44:51):
Were you doing consumer marketing for Wells Fargo or business to business?

Debt Hotline Guest: Shawn (44:55):

No, it was customer marketing. So mostly acquisition and retention marketing to current customers to utilize online services, so to bank online, pay their bills online, all of those types of activities that a lot of us take for granted now. But when I was first marketing these things, they were new and they were something customers wanted. So that was kind of a fun job.

George (45:20):

Well, certainly fintech's, the booming industry as well as banking bankings are, banks are becoming more and more powerful, and FinTech is certainly growing. So I'm sure you can get back on your feet and find a great spot, right? You have 15 to 20 years left of your career and certainly the best part of your career can still be ahead of you. Shawn, thanks so much for coming on. Glad you are the winner and glad we're helping you out.

Debt Hotline Guest: Shawn (45:46):

Yeah, absolutely. Thank you. No, I was happy to be here. I can't thank you guys enough.

George (45:51):

Alrighty, folks, thanks so much for tuning into the debt hotline. Again, my name is George, I'm founder of Solo. Thanks so much for showing up and stay tuned for our next giveaway. We will be starting another one soon, so just keep paying attention and watching to see when we start. If you have been sued for debt, you can go to Solosuit.com, just click reply to a debt lawsuit to get started on the response. Or you can click Settle a Debt if you haven't been sued yet, or if you've already responded. Also, you can click this great Ask Solo button, which I love, and you can have a chat with Solo AI to figure out what you need to do next. Alright, and this is based on chat GPT-4, which is really the award winning AI that has passed the bar exam as well as the CPA exam. And it'll give you tips tailored to you. You can also plug in your credit report and your finances to get tips tailored specifically to your situation. All right, folks, thanks so much for tuning in. Until next time, take care.

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. Doing business as Solo or any affiliated organizations.


SoloSettle by SoloSuit

Settle your debt
Save thousands

Make a settlement offer in minutes — no lawyers, no upfront fees.

$2.5B+
Protected
~40%
Avg. Savings
Make an Offer
4.7 from 635 reviews


How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Debt collector guides

Are you being contacted by a debt collector? We're making guides on how to resolve debt with each one.

Arbitration

If the thought of going to court stresses you out, you're not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Bankruptcy

Bankruptcy is a great way to legally resolve debt, but it's usually best to consider it as a last resort. Here are some bankruptcy guides to help you decide which debt resolution option is best for you.

Check your case status

Don't have time to go to your local courthouse to check the status of your case? We've created state guides on how to check the status of your case throughout the US, complete with online search tools and court directories.

Credit

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt, along with other credit-related resources.

Debt collection FAQs

Find answers to some of our the most commonly-asked questions about debt collection below.

Debt collection documents and templates

If you're dealing with debt, these documents and templates will help you respond, protect your rights, negotiate, and resolve your debts.

Debt relief

We've created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt settlement

Debt settlement is one of the most effective ways to resolve a debt and save money. We've created state guides on debt settlement. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

Eviction

Facing an eviction? The following guides will help you navigate your situation with confidence.

Federal debt collection laws

Knowing your rights makes it easier to stand up for your rights. Below, we've compiled all our articles on federal debt collection laws that protect you from unfair practices.

Helping people find access to justice is at the heart of Solo's misison. If you're dealing with a legal debt issue, the following guides will help you through it.

Medical debt

Having a health challenge is stressful, but dealing with medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Personal finance

Learn how to manage your finances and overcome crushing debt. Check out our personal finance guides below.

State debt collection laws

Debt collection laws vary by state, so we have compiled a guide to each state's debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote guides on each state's statutes and more.

Stop collection calls

Do you keep getting calls from an unknown number, only to realize that it's a debt collector on the other line? If you've been called by any of the following numbers, chances are you have collectors coming after you, and we'll tell you how to stop them.

Wage garnishment

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in your state, plus other wage garnishment resources.

The Debt Hotline

Hosted by Team Solo, The Debt Hotline breaks down debt and personal finance topics with help from attorneys, financial experts, and industry pros. We respond to real questions to help you navigate debt with knowledge and courage.

Other debt resources