[TX] What options are available when a debt collector rejects a settlement offer before filing a lawsuit?

TX Legal (General)

Andres Sanchez

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Based on your situation, there are several legal arguments and considerations in Texas that could potentially support your case:

Statute of Limitations: In Texas, the statute of limitations for credit card debt is typically four years, under Texas Civil Practice and Remedies Code § 16.004. This means that the creditor must file a lawsuit within four years from the date of the last payment or acknowledgment of the debt.
Debt Collection Practices: Texas law, along with the federal Fair Debt Collection Practices Act (FDCPA), regulates how debt collectors can interact with you. They must not engage in harassment or deceptive practices.
Settlement Negotiations: While the creditor has offered a settlement, they are not obligated to accept counteroffers. However, the lack of detailed terms in their offer could be a point of negotiation.
Service of Process: Since you haven't been formally served, the lawsuit hasn't officially started under Texas procedure. Formal service requirements are set out in the Texas Rules of Civil Procedure, Rule 106, which gives you some time to prepare your response or negotiate further.

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I'm being sued for credit card debt of about $11,500 and the firm is offering a settlement of $9,680.00. I countered with $7,500 over a 4 year term but it was declined by them. The firm didn't provide any terms or payment options on their offer. What options do I have?

Lexi, Chatbot

I understand that dealing with a lawsuit over credit card debt can be very stressful. Have you already received any court documents regarding the lawsuit?

No. I received advertisements from other law firms advising me of the lawsuit so I looked it up on the county website. I haven't been served.

Lexi, Chatbot

Have you had any previous communication with the firm about your financial situation or any other settlement offers?

I made 1 previous offer of $6,000 and it was also declined. Their offer email advised that the $9,680 is their final offer.

Lexi, Chatbot

Is there anything else the Consumer Protection Lawyer should know before I connect you? Rest assured they'll be able to help with your credit card debt.

Yes.

Andres Sanchez

Hey there! Welcome to AskaLawyer. I'm Andres Sanchez, an attorney with many years of experience. Just so you are aware, our service is a legal information only site. No attorney-client relationship is formed from our conversation. I understand you're being sued for credit card debt and have received a settlement offer. Could you provide more details about any steps you've already taken or considered regarding this situation?

I called the law firm and spoke to someone with a title of "legal assistant" and made an offer of $6,000 to be paid in installments, but it was declined. They countered via email with $9,680. I countered but they stuck with their same amount and didn't provide any additional details.

Andres Sanchez

Could you let me know which state you're in? This can affect the legal advice I provide.

I'm in Texas.

Andres Sanchez

Thanks for sharing that. Have you received any formal court documents or a summons regarding this lawsuit yet?

No, I haven't. I looked it up on the county website but I haven't been served.

Andres Sanchez

Got it, thanks for clarifying. Are there any other debts or financial obligations you're currently dealing with that might affect your ability to settle this one?

Nothing that would affect me settling this one.

Andres Sanchez

Based on your situation, there are several legal arguments and considerations in Texas that could potentially support your case:

Statute of Limitations: In Texas, the statute of limitations for credit card debt is typically four years, under Texas Civil Practice and Remedies Code § 16.004. This means that the creditor must file a lawsuit within four years from the date of the last payment or acknowledgment of the debt.
Debt Collection Practices: Texas law, along with the federal Fair Debt Collection Practices Act (FDCPA), regulates how debt collectors can interact with you. They must not engage in harassment or deceptive practices.
Settlement Negotiations: While the creditor has offered a settlement, they are not obligated to accept counteroffers. However, the lack of detailed terms in their offer could be a point of negotiation.
Service of Process: Since you haven't been formally served, the lawsuit hasn't officially started under Texas procedure. Formal service requirements are set out in the Texas Rules of Civil Procedure, Rule 106, which gives you some time to prepare your response or negotiate further.

I'm worried about my checking account being garnished. Can they do that to any account I have or would it have to be an account that I've paid that credit card from?

Andres Sanchez

Regarding your concern about garnishment, in Texas, creditors generally cannot garnish wages for consumer debt like credit card debt. However, they can potentially garnish bank accounts if they obtain a court judgment against you. This means they could target any account in your name, not just the one used to pay the credit card.

Here are some steps you can take to address your situation:

Verify the Debt: Make sure the debt is valid and that the amount is correct. You can request verification from the creditor or law firm.
Negotiate a Settlement: Since you've already attempted to negotiate, consider reaching out again with a revised offer. You might also want to ask for a payment plan that fits your budget.
Consider Legal Representation: Hiring an attorney can help you navigate the legal process and negotiate with the creditor. They can also help you understand your rights and options.
Prepare for Possible Court Action: If you are served with court documents, you'll need to respond promptly. An attorney can assist with drafting a response and representing you in court if necessary.
Explore Bankruptcy Options: If the debt is overwhelming and you have other financial obligations, bankruptcy might be an option. This can halt collection actions and provide a fresh start, but it has long term consequences.

Do you all have recommendations for legal representation in my area?

Andres Sanchez

Your best resource would be the bar association website for your state. I hope I was able to help resolve your issue! If you have any other questions, feel free to ask. Just a friendly reminder, you have access to experts across various fields. Don't hesitate to reach out whenever you need assistance!

Andres Sanchez

24,715 satisfied customers

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