When to Negotiate — The Timing Question
One of the first decisions defendants face is whether to negotiate before or after filing a written response. Both approaches have trade-offs, and what works depends on your situation.
Negotiating Before Filing Your Answer
Some defendants contact the plaintiff's attorney before filing to explore settlement. Here's what to consider:
Potential advantages:
- May resolve the case quickly with less stress
- Avoids the time investment of preparing an Answer and attending hearings
- Some plaintiffs offer slightly better terms pre-Answer because it saves them litigation costs
Potential risks:
- If negotiations stall and you've used up time, your 21-day deadline may pass — resulting in a default judgment
- Anything you say or admit during negotiations could be used later if the case continues
- Without a filed Answer, you have no leverage — the plaintiff can simply wait for your deadline to expire and take the default
- You may accept a deal that's worse than what you'd get after filing
If you negotiate before filing, consider these precautions:
- Track your 21-day deadline carefully. Do not let negotiations cause you to miss it.
- Do not make any admissions about the debt — keep discussions focused on resolution terms
- Get any agreement in writing before making any payment
- Understand that making a payment may restart the statute of limitations if the debt is old
- If the deadline is approaching and no agreement is reached, file your Answer immediately to protect yourself
Negotiating After Filing Your Answer
Filing an Answer before negotiating is what most legal aid organizations recommend. Here's why:
Your leverage changes. Before you file, the plaintiff can simply wait for the default. After you file, they have a contested case that requires attorney time, evidence gathering, and court appearances. The economics shift — suddenly settling for less costs them less than litigating.
You have time. Once your Answer is on file, the default judgment threat is off the table. The court will schedule a pre-trial conference weeks out. You have breathing room to evaluate your options.
The pre-trial conference is built for negotiation. Judges in district courts routinely ask parties at the pre-trial conference whether they've discussed settlement. This is the natural moment for negotiation, and judges often encourage reasonable resolutions.
How Negotiation Typically Works in Debt Cases
Whether before or after filing, debt case negotiations generally follow a pattern:
The plaintiff's attorney makes an offer. This is usually the full amount with a payment plan, or sometimes a slightly reduced lump sum. The first offer is rarely the best offer.
You can counter. Defendants who engage in negotiation often explore options like reduced total balance (paying less than the full claimed amount), structured payment plans spread over months, waiver of interest or attorney fees, or some combination of these.
Common settlement ranges. Outcomes vary widely depending on the strength of the plaintiff's documentation, the age of the debt, and the defendant's financial situation. There is no guaranteed range — it depends entirely on the facts. Legal aid attorneys who work in this area can provide guidance on what's realistic for your situation.
Everything should be in writing. Any settlement agreement should be documented in a written stipulation filed with the court. Verbal agreements are risky — they can be disputed later. A written stipulation typically includes the total amount to be paid, the payment schedule, what happens if a payment is missed, and a provision that the case will be dismissed upon completion of payments.
Payment Plans Through the Court
Even without a negotiated settlement, Michigan law provides options for structured payments:
Consent judgment with installments. Both sides agree to a judgment amount and a payment schedule. This is filed with the court and is enforceable. As long as you make payments, garnishment is typically off the table.
Court-ordered installment payments after judgment. If a judgment is entered, you can request that the court allow installment payments under MCL 600.6201. You provide the court with information about your income and expenses, and the judge sets a payment amount.
Pre-trial payment agreements. At the pre-trial conference, the judge may facilitate a payment arrangement on the spot. Defendants who come prepared with a realistic budget and payment proposal often get the best results here.
What Not to Do During Negotiations
Don't ignore your deadlines. If you're negotiating and haven't filed your Answer, the clock is still running. File your Answer to protect yourself regardless of where negotiations stand.
Don't make admissions. Keep discussions focused on "what will resolve this" rather than "I know I owe this." Settlement discussions are generally not admissible in court, but careless statements can still cause problems.
Don't agree verbally. If the attorney says "we'll accept $2,000" on the phone, that means nothing until it's in writing and filed with the court.
Don't pay without documentation. Before sending any payment, have a signed written agreement that spells out the terms, total amount, and confirmation that the case will be dismissed upon completion.
Don't make a payment on old debt without understanding the statute of limitations implications. If the debt is close to or past the 6-year statute of limitations in Michigan, making a payment can reset the clock. Consult a legal aid attorney before paying anything on old debt.
For a printable reference covering the entire process from service through trial, see the defendant's handbook.