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Points to make in a settlement offer letter?

Bethesda, MD |

I have a show cause hearing later this month regarding a default judgment from years ago. I've been told that I am basically judgment proof, but in an effort to put this long standing case(7+ years) behind me I would like to make a settlement offer.

What important points should be made in the letter? Should I point out that I am judgment proof & bankruptcy is an option?

Thank you.

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Attorney answers 3


If the opponent has a judgment your attempt to address this via a letter campaign is not a good one in my opinion. Negotiate without putting anything in writing. Or, if you have no refined negotiation skills, hire an attorney that has honed hegotiation skills through years of practice.


I agree with counsel that if you put your offer in writing, then this could expose you to unnecessary problems which you do not anticipate. Better to negotiate verbally. Better yet, hire an attorney to negotiate for you. I once had a case in which the other side likely would have obtained a multi-million dollar judgment against my client in California (I am licensed as an attorney in both California and Maryland) and I was able to negotiate a settlement of the entire case for about $16,000.00 because the other side came to realize that they would likely never collect against my client if they took it to an expensive trial and obtained the verdict which we all knew they would obtain. My client's motivation for accepting the settlement was that he wanted to move on with his life and not have to live with such a judgment hanging over him for the rest of his life (bankruptcy would not have been able to discharge that particular judgment because of what had happened in that case). So my former client pulled out $16,000.00 from credit cards and paid to settle the case. I believe my client later filed bankruptcy and wiped out most of the credit card debt. However, you cannot borrow money with the intent not to pay (otherwise you can be sued for fraud, which bankruptcy does not discharge), so keep that in mind if you borrow money to pay off the creditor in your case.

Office: (410) 381-1656. This is NOT legal advice, is GENERAL INFORMATION ONLY, and does NOT establish an Attorney/Client Relationship with you because you have not yet retained me, and because you have not provided me with a COMPLETE set of all the FACTS in your legal situation. Therefore my answer cannot address your specific legal situation and you should not rely upon my answer in your legal matter. This answer is provided as GENERAL INFORMATION ONLY, and to assist you in beginning your own research or in finding an attorney to represent you. I am an attorney licensed in Maryland and California. If you want me to provide legal advice, then you must call for a Consultation. If you would like me to represent you, then a Retainer and a fully signed and dated Legal Services Agreement (a contract) will be required. Office: (410) 381-1656. David Mahood, Esq.


Why are you facing a show cause hearing? What is the nature of the judgment/debt, and what has transpired to allow the creditor to file something with the court which has resulted in an order to show cause? Often, a show cause hearing is scheduled in conjunction with a motion to hold you in contempt of court for failing to abide by a court order, although it can be for other reasons as well. As for settlement, this may be a good time to pay a lawyer a couple hours worth of fees to attempt this for you. Drafting a stipulation of settlement which will fully and finally end this matter and discharge your further liability is not something you want to leave up to the creditor's lawyer, who will not be looking out for your interests.