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Can I negotiate a payment plan on a credit card debt if I am facing a default judgment hearing because I did not file an Answer?

Seattle, WA |

Do companies (this is a third-party collector) only accept the full balance or a lump sum settlement on the judgment they are seeking when the case has proceed to a default? If they do accept a payment plan in lieu of a lump sum, will they typically allow for a payment plan for a negotiated settlement amount that is less than the full balance? The balance they are seeking is less than $3,000.00.

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Attorney answers 4


I've been in court numerous times where the defendant debtor complained to the judge that the credit card company refused to accept a settlement or even a payment plan for the full amount. The judge uniformly responds (correctly), "They don't have to." If you have breached the terms of the credit agreement, they are usually contractually granted the right to accelerate the full amount of the obligation. They do not have to negotiate that away, and I have never known them to do so. Failing to file an Answer is not a horrible thing where you have no defenses anyway. Not that I recommend it, but it is better to not answer than to provide an untruthful answer.

Without knowing all of the details, reviewing documents, and interviewing witnesses, no person should assume that this Answer constitutes specific legal advice for any specific legal situation. No attorney-client relationship is created by posting general legal responses on this site.


Generally, you may be able to negotiate a discounted settlement in exchange for one time payment (or maybe 2-3 payments). If you need a longer term payment plan then in my experience you will not be able to get a discount on top of the payment plan.

Best of luck,
Tim L Eblen


You can "try" anything. The issue is whether the creditor will accept.

If the plaintiff accepts a payment plan, they will have you sign a stipulated judgment. What that means is if you default on the payment plan, they can simply file the stipulated judgement with the court and immediately proceed to enforced collection.


As general rules: companies require a lump sum payment. If this is less than the full balance, debtor counsel can generally get creditors to agree, even at this stage, to subsequent monthly payments. And under the preceding arrangement, the Creditors typically will still settle for a % of the full amount sought.

My experience is debtors can still get a favorable settlement with most all creditors, even in the event it has gone as far as a final court judgment, in terms of negotiating and settling for just a % of the overall bill or judgment amount. But the longer one waits to pursue this strategy, the less likely creditors are to offer as good of a deal. Again, note that this strategy usually requires paying a large initial lump sum amount to the creditor, followed by a few monthly payments if need be.

Some attorneys, including Yours Truly, offer reduced hourly rates for initial consultations on such cases and/or flat fees for initial court actions so that you, the debtor, aren't left with a large unexpected legal defense/negotiation fee. When considering legal representation, and not that this is going to happen, but it's always better for folks not to be 'penny wise (forgoing hiring legal representation) but pound foolish (settling for often much higher $ amounts)”; indeed, my experience is that, invariably, attorneys are able to get significantly better settlements compared to a debtor negotiating w/ a creditor on their own.
I recommend to contact/hire counsel so you have opportunity to save more $ on this, typically even considering your attorney fees

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