I approached the creditors for settlement after receiving summons. They are offering me a 'stipulated judgement', and agreed not to proceed with the collection. The lawsuit won't be dropped either. I don't want to file bankruptcy, but am unable to understand the consequences of this offer as well. Will it be a wise move to accept?

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And yes, as Rachel has pointed out, consult with an attorney. There might be other forms of defense against the lawsuit, and he or she can check that your rights are protected with the agreement.

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Stipulated judgements are not that unusual. Creditors often propose that.

Do know that your approval means you'll be allowing them to win lawsuit. They won't continue with the collection through garnishment or impose lien etc. but judgement will be entered against you. If you miss payments, that's going to show up on your credit report. Are you sure that you'll not ever miss the payment plan?

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Not a good option, if you ask me. Still if you accept, make sure an attorney reviews the stipulated agreement from your side.


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