[MN] [MN] I received a collection letter saying the creditor is suing me for debt. What should I do?
I did receive a letter that I was being sued, but I wasn’t sure how to handle that since I’ve given the car back — and the payment amount was still above $16K after taking the vehicle.
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You do have a couple of options.
Option 1: Try to Settle the Judgment
You could negotiate a settlement with the creditor.
- Offer a lump sum payment, possibly for less than the full amount owed, to settle the debt now.
- Alternatively, propose a payment plan.
Before making any offer, develop a negotiation strategy:
- Determine the maximum amount you can afford.
- Start with a lower offer so you have room to negotiate.
If you reach an agreement, get the settlement terms in writing.
Contact the attorney who filed the lawsuit on behalf of the car loan company to make your settlement offer.
Option 2: File for Bankruptcy
This is a very common solution in cases like yours.
- Filing for bankruptcy would prevent the creditor from collecting on the judgment (through wage garnishments or bank levies).
- It would also eliminate the debt entirely.
- Bankruptcy is often faster and cheaper than negotiating a settlement for the full amount.
- However, because it’s a complex process, you should hire a local bankruptcy attorney if you decide to go this route.
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Need help with getting a collection letter situated.
Lexi, Chatbot
I understand you're dealing with a collection letter issue. Have you received any communication from the collection agency recently?
I received a notice entry and statement of judgment.
Lexi, Chatbot
Can you provide more details about the debt in question and any previous attempts to resolve it?
I got my car repossessed, and they are still trying to charge me $16K. I want to get this resolved and off my credit.
Lexi, Chatbot
Is there anything else the lawyer should know before I connect you? Rest assured they’ll be able to help with your repossession issue.
Yes.
Alex, Esq.
Hello, my name is Alex, and I'll be the attorney assisting you today. Thank you for using JustAnswer.
I have over 15 years of experience with debt collection issues, and I’d be happy to answer your questions. I'm sorry to hear about the problems you're having with this creditor — I know that can be a very stressful situation.
Before we continue, can you please provide a little more information?
- Just to clarify, have you already been sued for this debt?
- What does the collection letter state?
I did receive a letter that I was being sued, but I wasn’t sure how to handle that since I’ve given the car back — and the payment amount was still above $16K after taking the vehicle.
Alex, Esq.
Thank you for the quick response. Do you have any information about the lawsuit? For example, has the lawsuit just been filed and you still have time to respond? Or has the court already issued a judgment against you?
The lawsuit was filed. I got a letter about a week ago from the State of Minnesota, and it is a statement of judgment — a judgment roll letter.
Alex, Esq.
Thank you. Has the creditor tried to collect on the judgment yet? For example, have they tried to garnish wages or a bank account, or put liens on any property?
Not as of yet. I haven’t gotten anything about garnishing wages.
Alex, Esq.
You do have a couple of options.
Option 1: Try to Settle the Judgment
You could negotiate a settlement with the creditor.
- Offer a lump sum payment, possibly for less than the full amount owed, to settle the debt now.
- Alternatively, propose a payment plan.
Before making any offer, develop a negotiation strategy:
- Determine the maximum amount you can afford.
- Start with a lower offer so you have room to negotiate.
If you reach an agreement, get the settlement terms in writing.
Contact the attorney who filed the lawsuit on behalf of the car loan company to make your settlement offer.
Option 2: File for Bankruptcy
This is a very common solution in cases like yours.
- Filing for bankruptcy would prevent the creditor from collecting on the judgment (through wage garnishments or bank levies).
- It would also eliminate the debt entirely.
- Bankruptcy is often faster and cheaper than negotiating a settlement for the full amount.
- However, because it’s a complex process, you should hire a local bankruptcy attorney if you decide to go this route.
Alex, Esq.
Please send me any follow-up questions you might have after reviewing this information.
Alex, Esq.
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