Settlements are typically the main objective of both parties to the credit card case. There is a sense of finality that the matter is resolved and behind the parties. For the plaintiff, a settlement brings some but not all of the fruit from the collection process. For the defendant, a settlement allows the person to get back to worrying about all of life’s other problems and issues and stop worrying about this one. A settlement is considered a good one where each side is both satisfied and dissatisfied at the same time.

Agreements to settle may be made at any stage of the collection process: pre-suit; post-filing but pre-judgment; and post-judgment. The agreement, at a minimum, will contain the following provisions:

  1. An acknowledgment or admission of the debt or liability;
  2. Settlement amount, either with or without interest;
  3. Payment terms, such as a lump-sum figure or regular installments over a certain period of time;
  4. The steps to be taken by the plaintiff after the settlement amount has been paid to dispose of the matter; and
  5. Entry of judgment or continuation of enforcement proceedings if the defendant defaults in making the settlement payment.

Once the matter has been settled, there are different types of documents which the plaintiff will file to acknowledge the settlement:

1. Stipulation of Discontinuance

The Stipulation of Discontinuance is filed by the parties to the action with the clerk of the court. It informs the court that the parties have agreed to discontinue the case voluntarily and that no further court intervention is needed. The stipulation should state that the discontinuance of the action is “with prejudice,” meaning that the party may not reinstitute proceedings on the claim.

2. Satisfaction of Judgment

Once the Judgment has been entered by the clerk of the court, the parties satisfying the Judgment debt (“judgment debtor”) would be entitled to a Satisfaction of Judgment, which is filed by the judgment creditor or its attorney, signifying that the Judgment has been paid.

3. Release

The Release is a document that provides that the settling party waives all claims against the other party. It may be a “General Release,” which releases the party from any and claims and causes of action the other party from the beginning of time through the date of the Release, or it may be a “Limited Release,” which releases the party from all claims relating solely to the claims in the action. In credit card cases, the Release will generally be limited to the relevant account, as many consumers have more than one account with the same lender.

4. Credit Reporting Agencies

Most consumers are already aware that lawsuits and judgments appear on their credit reports, and there is a harmful effect to their credit scores as a result. Accordingly, it will be important to ensure that the credit reporting agencies (Experian, Equifax or Trans Union) are informed of the settlement. A dispute or update to the consumer’s credit report may be warranted or necessary in order to ensure that the report is accurate, as well as to alleviate any harmful effects to the credit score.

The contact information for the three major credit reporting agencies are:

P.O. Box 740241
Atlanta, GA 30374

P.O. Box 2002
Allen, TX 75013
1 888 397 3742

P.O. Box 1000
Chester, PA 19022

Every consumer is entitled to review his or her credit report from each of the above three credit reporting agencies but accessing them at

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