How to Negotiate Credit Card Lawsuit Default Judgement Without Filing Bankruptcy

When faced with a $25,000 judgment from a major bank, many debtors feel like they only have two choices: declare bankruptcy or prepare for aggressive collection. But there are often other paths available — especially when debtors understand their rights and document their effort

The Debtor’s Situation

In this case, a debtor in Florida had a default judgment hearing scheduled. Collection efforts had already begun, and she was being told she would need to pay $427 per month — more than a third of her income.

She was clear about two things:

• Bankruptcy was not the option she wanted.

• She could manage a monthly payment, but only if it was realistic.

Her own number: $385 per month felt like the maximum she could handle.

Research into Debtors State Garnishment Laws

Through guided research into debtors state wage garnishment limits, she was informed that creditors are generally capped at 25% of disposable earnings for wage garnishments in her state.

With an income of about $1,200 per month before ANY DEDUCTIONS , this meant a garnishment closer to $300 per month, significantly less than the $427 being discussed.

That research gave her confidence that she wasn’t obligated to overpay beyond what the law allowed.

Building a Negotiation Path

The debtor wasn’t just throwing numbers around. She was guided by a strategy built on three pillars:

1. Research-backed measurability
   – The wage garnishment limit in her state gave her a measurable baseline (around $300/month). This showed her she had room to negotiate below the $427 being demanded.

2. Believability for the court and opposing counsel
   – Offering $250/month wasn’t an unrealistic “lowball.” It was a good faith offer within her means, backed by written communication. Judges and attorneys are far more likely to respect a debtor who demonstrates reasonableness rather than silence or refusal.

3. Desirability for both sides
   – For her: the payments fit her budget.
   – For the creditor: they avoided spending more time and money chasing a judgment that might never be fully collectible.

4. Stateable simplicity
   – Her position could be summarized clearly:
   “I am willing to pay what I can afford, here is my written offer, and I am not refusing to settle.”

That clarity is powerful. It guided her every step of the way.

Documenting Offers in Writing

Every offer was put in writing to create a paper trail. This mattered because:

• Judges value documented reasonableness.

• Written communication flips the burden back on the creditor’s attorney.

• It shows the debtor is not being evasive ; she’s making good faith efforts.

This is how leverage is created in court without ever arguing about complex financial structures or legal theories.

The Negotiated Outcome

After some back-and-forth, the attorney for the bank responded with a settlement proposal:

• Reduce the balance from $25,606 to $15,000.

• Accept payments of $250 per month.

• Spread the repayment across 60 months.

• Waive attorney’s fees and court costs.

This outcome gave the debtor:

• A reduced balance.

• A manageable monthly payment.

• Relief from the threat of immediate enforcement or bankruptcy.

  

  Why the Settlement Offer Worked

  When the bank’s attorney responded, the numbers made sense because they checked every box:

  • Balance reduced from $25,606 to $15,000 (a tangible, measurable difference).

  • Monthly payment set at $250 — believable given her income and supported by state law caps.

  • Waiver of attorney’s fees and court costs — desirable because it removed hidden expenses.

  • 60 months to pay — statable as a simple plan: “$250 for 60 months, no extras.”

  The outcome wasn’t accidental. It was the result of being guided by research, reason, and strategy instead of fear or pressure.

Lessons for Debtors Facing Judgments

This story highlights a few important takeaways for anyone facing a judgment from a major bank or creditor:

• Research your state laws. Understanding garnishment limits can prevent overpayment.

• Communicate in writing. Written offers create a paper trail that shows good faith.

• Focus on what you can manage. A realistic, affordable payment is more persuasive than silence.

With the right approach, debtors can often find solutions that avoid bankruptcy, even in the face of a large judgment.

This blog is for educational purposes only and not legal advice.

👉 Ready to build a strategy for your own situation? Book a Strategy Session today: https://debtdefensepro.com/ftssession