Sued for ~1200 dollars in debt in Arizona

[Popoteal]

Hi, stressful situation over old debt.

Who: Owed CC debt to a bank who sold debt to a company. They hired lawyers at some point and they filed suit.

What: They served my roommate papers for me a couple of weeks ago. They're suing me over ~$1300 in debt. The papers have a Card User agreement, a letter they supposedly sent me indicating they sold the debt to another company (the address of the letter was incorrect, off by a number), and a copy of a CC statement mailed to me at some point detailing principal and interest owed.

Where: Arizona. The company suing me is in Colorado.

When: The debt is 2-3 years old. I have a few days to file a response.

They sent me a letter a week after serving me. Offering me a lump sum settlement (I called to inquire, it is 95% of the total debt), or pay make payments to the full amount including fees incurred (they would still week judgement but not pursue garnishment or etc. if I paid in a timely matter). How should I go about this?

 

[FlyingRon]

The debt would likely be within the limitations period. As long as the debt is yours, I'd be seeing if I could arrange a payment plan with the creditor.

 

[adjusterjack]

How should I go about this?

The lawsuit is well within the 6 year AZ statute of limitations and process service on your roommate was proper. That they sent you a notice to a wrong address about the sale of the debt is irrelevant. You knew you owed the money and had plenty of opportunity to pay it in the past but didn't.

Your options are all bad, but some not as bad as others.

Just understand that if you do nothing, you will lose the lawsuit, and your wages will be garnished.

Options better than that are as follows:

1 - Agree to the payment plan as offered for the full amount if you can't afford a lump sum cash settlement.

2 - If you have cash available counter offer a lower full and final settlement amount in exchange for dismissal of the lawsuit. Make sure you get the agreement in writing. They'd probably take 65% to 75% to close it out. They want money now, not in dribs and drabs from your pay, so cash talks.