Do you have to pay the creditors attorney fees and assorted fees tacked on to the original debt if sued or can you still settle for less at that point?

Answer 1

Possibly, but only if the creditor suing is willing to do so. A settlement is purely voluntary. If the creditor believes it has an open and shut case against a debtor for both the debt and fees, the creditor might have no reason to accept less than it would get in a judgment. It is always worth it to try to settle for less than the total amount sued. There are several reasons that motivate creditors to take less. Creditors almost always will take something less than the full amount if the case can be closed. If a creditor gets a judgment and has to garnish wages, it will take some time before the amount is paid, there will be lots of bookkeeping involved and the judgment amount will earn a low rate of interest. It is better for the creditor to take even 70% or less of the debt just to close the file and move on. Also, keep in mind that sometimes, creditors throw in those extras like interest and attorney fees to inflate the amount sued for just to scare the debtor into "settling" for the full amount of the original debt. Some creditors know they will not be awarded these extras but they sue for them anyway hoping the debtors do not know this.