Settlement Negotiation Utility

Debt Lawsuit Settlement & Discount Savings Estimator

When sued by a debt buyer (such as Midland Credit Management, Portfolio Recovery Associates, or LVNV Funding), they typically purchased your debt portfolio for 1 to 4 cents on the dollar. Because their cost basis is extremely low, debt buyers routinely accept lump-sum settlements between 30% and 50% of the sued balance to avoid trial expenses.

Estimate Settlement Target Ranges

Total Amount Claimed in Complaint / Lawsuit ($):

Type of Plaintiff Suing You:

Crucial Terms in Any Lawsuit Settlement

Dismissal WITH Prejudice: The settlement stipulation must require the plaintiff to file a Notice of Dismissal WITH Prejudice upon receipt of funds. A dismissal without prejudice allows them to sue you again.
No Judgment Entry: Never agree to a "Stipulation for Entry of Judgment" or "Confession of Judgment" unless the judgment is strictly stayed and voided upon completing payments.
Tax Considerations (IRS Form 1099-C): If a creditor cancels $600 or more of principal debt, they may issue an IRS Form 1099-C. However, if you were insolvent (liabilities exceeded assets) at the time of settlement, you can exclude the canceled debt from taxable income using IRS Form 982.