Short answer
A verbal agreement is not a settlement. Get the deal documented in a settlement letter, check that the letter contains the items that protect you, and only then send money. Paying off a settlement without a written agreement is a mistake you will regret if the account resurfaces later.
Key points on this page
- No deal is a real deal until it is documented and then paid in line with the terms in the letter.
- A settlement letter should show the creditor or collector name, the date, your name, your account number, the amount accepted as settlement, the payment terms and due dates, and wording that the account is settled or satisfied in full. If any of that is missing, ask for a new letter.
- Never release payment information to a debt buyer, or to a collector working for a debt buyer, without documentation in hand.
- Some large banks will not release a letter until payment arrangements are set up in their system. That is sometimes acceptable with an original creditor, and only in limited cases with a collector working for one.
- Schedule the first payment far enough out for the letter to reach you, 10 days or longer. If it has not arrived 72 hours before the payment processes, demand a fax, and be ready to walk away with the funds out of the account.
- Keep a copy of every settlement letter, including the deals a professional negotiated on your behalf.
We just discussed how to negotiate debts successfully on our own, but that doesn’t close the deal…yet. Negotiating debt and paying the new agreement requires a settlement letter. In the wacky world of debt collection, debt buying, and credit reporting, paying off a debt you settle without having a documented agreement, is a mistake. And one you will regret later on if the credit card you thought was settled (other types of debt too) resurfaces in a way where a written agreement to accept less could show the account was resolved, instead of the headaches you may go through without one.
NOTE: This post is part of our Debt Settlement Guide. If you’ve missed any of the previous content, or would like to start at the beginning, please see the links at the bottom of this page.
Reaching the point where you have a verbal agreement to settle and pay off a debt for an amount you can afford is exciting, and a relief at the same time. You must be careful not to lose sight of what are still critical concerns before celebrating your success. This information will help you focus on crossing the debt settlement finish line with confidence – when your success is documented.
A Verbal Agreement is Not Enough
When you’re negotiating directly with creditors, your settlements are generally going to be reached verbally first. The verbal agreement will be for a set amount of money either paid all at once, or paid by making several installments over a set period of time, until the settlement agreement is met. It’s important that you understand the deal is not done until it is documented and fully funded, consistent with the terms and payment timelines laid out in a debt settlement letter.
Verbal communication with creditors and debt collectors are a necessary part of the debt negotiation process. How and when to communicate with creditors and debt collectors to negotiate with them is covered extensively throughout this site. Ongoing communications over the phone with your original creditors and debt collectors can progress until you have the money you need to settle.
You should not attempt to negotiate an account, or offer a settlement amount, until you have the targeted dollar amount you need to fund an agreement. It makes little sense to start negotiating a settlement amount if you don’t have the money to pay. Just making calls to “feel out the situation” wastes everyone’s time and could hurt your efforts later.
Your targeted settlement amounts will be different from one account to the next. If you’re working with someone in the network, you’ll be able to set realistic settlement percentage targets, timelines, and goals using real-time data about your creditors and the debt collectors involved.
If you are a DIY reader, be sure to participate in the comment sections of relevant page topics in order to get feedback about timing and targeting for your debts you are looking to settle. The comment section at the bottom of this page is the perfect place to post questions about a settlement letter you have received, or what you could do if you’re having a hard time getting one sent to you.
Reviewing Your Debt Settlement Letters
Reaching a settlement agreement can take one phone call, or it may take several calls over a period of days, weeks, or even months. When a deal is struck, you know that no deal is a real deal until it is documented, and then paid in accordance with the agreement.
Debt settlement letters with original creditors and debt collectors are typically a standard form that will consist of the following:
- The creditor and/or debt collectors name.
- The date the letter was drafted.
- Your name.
- Your account number.
- Outstanding balance owed on the account (this is sometimes missing and is not a deal breaker).
- Amount that is being agreed to as settlement and satisfaction of the debt (less than the full amount owed).
- Terms and amounts of payments to be made – if you are settling the account over a period of time – instead of with one lump sum.
- Date your payments must be received by in order to have met the settlement agreement.
- The settlement letter must reference that the account being satisfied in full i.e. “settled”, “settlement of this account”, “accepted as settlement in full”, “paid in full”.
The letter will have other general information, such as disclosures about settling debt. Creditors and collectors put this information in to cover themselves. The bulleted items above are what you want to see in a settlement letter to cover yourself.
Settling with a third-party debt collector means you must get the above details documented before remitting any payment towards the agreement. If the above bulleted items are missing from your settlement letter, you should request a different letter be sent to you that meets the above specifications.
Watch this quick video about debt settlement letters:
Setting Up an Agreement Without a Letter
Some of the large banks will not release a settlement letter to you until your payment arrangements are set up in their computer system. They will request that you give them specific electronic or ACH payment information over the phone first. Should you agree to this? Yes, in some instances.
If you’re experiencing a creditor or collection agency holding back sending you a settlement letter, be sure to post about that in the comments below to get feedback about how each one of your creditors deals with this prior to settling, or negotiating your agreement and setting dates for payment. This way, you know what to expect beforehand, or can navigate the negotiation and settlement process of a specific account with more confidence.
Schedule your first (or only) payment for a future day that gives enough time for the settlement letter to reach you by mail. 10 days or longer would be best.
- Make payments on the settlement from your bank account that you set up specifically for saving and funding the agreements.
- If you do not receive the settlement letter within 72 hours of when your payment is scheduled for processing, you can call and demand the letter be faxed to you, or the funds will not be available in the account.
- You should be prepared to walk away from a deal if you do not have documentation in hand before the payment date. As a caution, be certain you don’t have the funds in your set-aside account on the date you set up a payment – if you are walking away from a deal.
Providing information and setting payment dates in advance of having received a settlement letter is usually only an option I consider when dealing with original creditors, and in some limited instances, debt collectors working for your original creditor.
Do not release payment information to debt buyers, or debt collectors working for debt buyers, without documentation in hand.
There are some instances where I will recommend you record a phone conversation about agreeing to settle a debt. I always encourage you to tell the debt collector that you are recording the call and why (they refuse to send you the agreement in writing before payment is set up).
Receiving Debt Settlement Letters Via Fax
Technology has provided many conveniences and cost savings when communicating important details that require documentation. Documents can be emailed with the click of a mouse. It may surprise you to learn that banks and collectors do not readily take advantage of technology advancements. You will find that many internal recovery specialists (bank employee debt collectors), and outside debt collectors working for collection companies, are not allowed to email anything to you. One way to work around the delays of getting settlement letters mailed to you is to get them faxed to you.
If you do not have access to a fax already, you can set up a virtual fax service. This would give you a 10 digit fax number that others can send documents to, and you can receive the faxed documents as attachments to an email, or receive an email notice a fax has been sent to you to log in and download, or print.
One of the services I recommend to receiving debt settlement letters via fax is eFax.com. The cost of an efax account, or similar virtual fax services is low. Setting up a way to receive faxed settlement letters is worth the cost when dealing with time-sensitive communication and funding of settlement agreements you’ve made. Getting the settlement letter faxed the same day is especially handy if you follow some of the “end of month”, or “end of collection agency contract” strategies that I lay out on this site, and other personal finance sites.
Working with a debt settlement company, or a professional negotiator, should not mean you let your guard down about getting settlement agreements documented and in your hands. Just because someone else is handling the heavy lifting doesn’t mean you should not be concerned about having copies of all settlement letters. Be sure to get a copy of all debts that have been negotiated and funded from any professional you work with as each of your debts are being settled.
With business trends for electronic data storage, and the fact that computer systems can crash, physical documents this important should always be in you possession.
Conclusion:
Negotiating and agreeing on an amount you will settle a debt for is primarily going to be done over the phone. Once you have a verbal agreement, it must be followed up with documentation. The settlement letter should meet certain requirements before you remit payment in full, or make a partial payment. If you do not receive a settlement letter, or a letter does not include what is standard information to protect you, it’s okay to walk away from the deal. You can receive settlement letters via fax and mail (sometimes even email). No settlement letter means you don’t have a deal. Keep all settlement letters in a safe place with all of your other important documents.
Almost done. The final step in our Debt Settlement Guide is paying debt collectors after the negotiations are done.
If you have questions about your settlement agreements, please comment below for dedicated feedback, or call 800-939-8357, ext. 2 to reach me directly.
This Debt Settlement Guide includes:
An Expert Guide to Credit Card Debt Settlement
How and Why Banks Settle Credit Card Debt with You
Types of Accounts to Include in Your Debt Settlement Plan
Why Settling Credit Card Debt is Like a Race
How to Settle Credit Card Debt Quickly
How to Talk to a Debt Collector
How to Negotiate Credit Card Debt Successfully Yourself
7 Largest Credit Card Banks and How They Settle Debt
Get Debt Settlement Letters and Agreements from Collectors (you are here)
Paying Debt Collectors After You Negotiated a Settlement
Hi,
I’m trying to negotiate a settlement with Central Finl Control. They’ve agreed to settle a $1580 for $855. They refuse to send me a settlement letter beforehand. They say I can request one after they’ve received my payment. Now they say my payment is due today, June 27, otherwise the offer is rescinded. I also said I would send them a certified check because I was not going to give them my account info. They said I would have to overnight the check to them.
Should I walk away from this and revisit at another time. I’m very leery of giving them my money without a letter, especially after reading the above question/answer?
Thank you in advance for your help!
Ann – If I were you, I would walk away. Settling debt, and getting the agreement in writing, is just too common place for them to tell you to request a letter outlining the agreement afterward.
I found a BBB alert for Central Financial Control that said “According to information in BBB files, this company is no longer in business. If you have an unresolved dispute with this company you may wish to seek legal advice.” You can see the BBB alert here. This may not be the same entity you are dealing with, but the alert is a concern set beside the other issues.
Who was this debt originally with? How long ago was the past payment you made? What state are you in?
Thank you for responding. I initially tried sending a certified letter to CFC offering a settlement. I got the address from my credit report. (Ive never received a letter from them). It was returned so did some digging online and also came across that BBB alert. I called Sierra Vista Regional Medical Center where the debt originated and they gave me CFC’s number. I am in California. The debt was reported to CRA in 2010.
Ann – It would be a good idea to call the medical center and verify whether the debt was sold, or if the account was assigned out for collection. My feedback will be different depending on the answer to that.
I just got off the phone with the medical center’s billing dept. They confirmed the account was sold to CFC. I called CFC again to see if I got a different answer from them, but the agent said it’s company policy not to send out letters before payment. He did say the company will send “random” letters of settlement offers, but not confirmation letters. He said they have no reason to lie to me, back out on the agreement , come after me for more money and put their company at risk for $500 extra.
I read online that someone wrote on the back of a check something to the effect “this settles my debt with (debt company)” and by said company cashing the check it was in essence an agreement. This person said the collector came after the balance owed months later, but he faxed them a copy of the back of the check and never heard from them again. Would that work?
Ann – I called Central Financial Control. I spoke with a Rep, Tiffany, and a Supervisor, Laura. Both were very pleasant and helpful.
Ways I would encourage you to proceed:
Call back and go over the details of your settlement and record the call. You need a new due date. Take care to write down who you spoke with and the date and time of the call as well as the highlights of the conversation. Be sure that you send payment in a manner they must sign for, and that is recorded (USPS Express, Fed Ex), this way you can show receipt. Also, send check with a MEMO note “Payment for our agreed settlement in full”. Similar to the accord and satisfaction you brought up in your above comment.
Michael,
Thank you for your advice and for even going as far as to call CFC. I took your suggestions as to how to proceed.
Now I’ll wait to see if they close my accounts as promised once they get my settlement payment. Fingers crossed. Thanks again. I’m so glad I found this site!
On the whole, very good advice. I wouldn’t do anything without some sort of letter. One thing that is of concern, however, is writing a statement on the check regarding it settling the debt in full. Although it won’t hurt to do that, it really isn’t a binding agreement. People have been trying that for years, in an attempt to say something (a car, boat, house, credit card, etc.) is paid in full by them cashing the check, when there are many payments left to be made. The courts just won’t uphold that, mainly because it would be giving the debtor the ability to cancel a debt just by writing a phrase on the check, and if the company owed doesn’t agree with the statement, then they don’t get the money. Similar to post-dating a check. You can post-date all you want, but most banks never look at the date on a check. And even if they do, they will still cash it when it is presented. And the courts side with the debt holder and the bank as well.
I had 3335.00 in a credit card debt to First Bank,,they sold or turned the debt over to CACH, LLC. Sterling Atlantic Law contacted me about the debt and said if I agreed to a settlement of 1,500 they would forgive the debt..I never received a settlement letter in the mail..they said there was no “settlement” until the debt was paid..I agreed to pay 1200 on 5/31 and 300 on 6/14. On 5/31 I couldnt make the payment (due to surgery) and asked that the payment date be switched out two weeks to 1200 on 6/14 and they said they would have to increase the final payment to 634.00 due on 6/28…I paid the 1200. on 6/14…still no settlement letter indicating anything..I called and asked them about it and they said they dont send out settlement letters until the debt is paid in full..I asked them what does “in full mean” because I have nothing in writing as to what we verbally agreed on. Please help me!! I dont know if I should make the final payment on 6/28 when I have nothing in writing
and they say that they are not lawyers,,,when I asked for a settlement letter,,they said “the lawyers dont send them out until the debt is paid off and I have to call and request that letter”.
Amy – Unfortunately, I am skeptical of how this will turn out for you without a written agreement to rely on. I have seen too much of what has occurred with you – after the fact – to think otherwise.
You may want to call and speak with the same rep and record all that you discuss. If this results in them trying to continue to collect, you will want to have something tangible to fall back on that represents the nature of your negotiations. You will be able to escalate their acting in bad faith if need be, but will want something to substantiate your position.
Please post any update with your scenario. I can assist you with some paths to resolution if it comes to that. Let’s hope it doesn’t.
Hi Michael,
Thank you for your informative website. I will definitely review. We have an account that is going on 90 days late through Carecredit. Still calling the number on the Care Credit they offered us a settlement of 900.00 on current 2682.00 and want us to set up a payment through our bank account post dated June 14th. They stated that they could only mail the letter of settlement after talking to them on the phone several times, the latest time for 2 hours.
Our second care credit account we are trying to settle is a care credit account through Allied Interstate. They seem to be offering the same type of agreement…is this safe?
Last accounts are through Chase but we haven’t started calling them yet. Any advice for Chase bank?
We are in Michigan and my husband lost his job in 2011, with no unemployment (he has been working small jobs that pay 1/4 of what he was making and are temporary, with no end in sight)…so we are trying to cut our losses in lieu of having to declare bankruptcy, as we are at the end of our financial limit.
Thank you for your time and knowledge, this is a valuable resource for consumers.
Kathy – Getting the settlement mailed to you should not be a problem if the payment is set up that far in advance. You would look to get the agreement in the mail prior to the payment pull date. If the letter does not show up, you do not put money in the account a day or two before the payment draft date. Check out this report on how to pay your settlement.
Settling with Allied Interstate LLC is pretty standard stuff. They do typically send a settlement letter, but depending on who they are collecting for (Care Credit/GE Capital in this case), they will have different ways for how they send it out. Following the set aside account guide I linked to above is much more than simply suggestive when dealing with thrid party debt collectors, debt buyers, and collection attorneys.
Check out this page about how to settle with Chase. After you review that information post in the comment section on that page with questions for those credit cards. Be sure to share what the balances are with Chase when commenting. It could make a difference in the feedback I have to share.
Hi Michael,
Thank you for your advice. I (finally) finished the settlements through Care Credit and received the letters without difficulties (and set up a separate bank account). So that is going well.
I am about to tackle Chase.
I very much have appreciated and used all of this information.
Kathy
Awesome Kathy! Thanks for posting updates. I like to know that people are succeeding with their goals and efforts. A larger benefit from you and others keeping these pages updated is that other readers can take a measure of confidence in their own decisions, even if they do not participate in the comments (which are most readers).
Yes, good. I settled with three payments for both of the Care Credit accounts. The settlements were pretty generous, however the fees and interest on those accounts had more than doubled the original amounts, so it kind of balances that out. We’ve been setting aside money to contribute to the settlement offers, as well as receiving help from mother-in-law (with good fortune). I read your website advice thoroughly so I knew what they were talking about and what to discuss at every step. I’ll let you know how it goes with Chase. It is a psychologically difficult thing, but it feels good to complete (and not to declare bankruptcy too–of course, we’re fortunate to have the help from MIL). Thanks again!
Hi,
Im here because i just found out that i have some medical accounts unpaid showing on my credit report. I recently contacted this company “Online Collections” onlinecollections.com to try to settle this account. First of all they didnt even have an account for me they coulnt find me by my social security number. So they searched by my name. Then they told me that my balance was $259 but that they could settle this account for $200. I asked the manager that i spoke to if i could get a settlement letter first and he said no. Till this day i dont have an account number with them i have NEVER received a bill from them or anything. So my question is can i trust these people and send them a payment? and wait for that letter afterwards?
Natalia – In a word – no. Without a written letter from them, along with a record from your side showing proof you paid according to the terms of that letter, you could find yourself stuck later. The settlement agreement and proof of payment will allow you to quickly resolve any later collection attempts, and also give you what you need to get any credit reporting corrected if need be. Without a letter you face an uphill and frustrating battle should something occur later on by mistake, or lack of follow through on a the collection agency side.
Laurie – Given the additional info you have shared I do think you put them on their heels a bit. That is not your problem though.
Receiving the settlement letter by fax is completely fine. I still do not get why they are requesting you email the operations manager. It is silly. But it could be because of how the interactions have progressed thus far. Most people calling debt collectors, or picking up calls from collection agencies, do not experience multiple references to the FDCPA.
This whole thing has me curious. If you are up to it, once you receive the settlement letter, I would like to review it with you over the phone. Post a comment update when you have the agreement and I will email you at the address you use to post here.
I just received the settlement letter, but it sure is not what I was expecting.
Laurie – It was good to talk with you in review of the settlement letter. Please keep the comment string updated with any new developments.
Well I should have listened to my inner voice that said stop…..something doesn’t sound right. As per our discussion, I did call Main Street Acquistion and they did sell the account to AmSher, but were completely unaware of any settlement that was reached between Jason Borkovec – the so called Director of Operations, which is a load of crap. I found out that the only reason I had to email this character was because they – AmSher stated “that their attorneys had to look over things and put it in writing.” Also during this phone call with Main Street, “I was told that I had to request in writing who was charging me the continued interest and at what rate.” I was refused this information over the phone. After this huge cluster skunk, I try and pay the settlement with AmSher only to be told by the one operator that the amount will not be satisfied nor will it be reported as settled. I explained that I emailed the Director of Operations my request and that it was accepted, but I guess they employ improperly trained staff. And yes, I put them back on their heals because I was trying to do what I agreed to, but I guess email correspondence, even after the attorneys look at it don’t mean a hill of beans. Not sure where to go from here?
Did Main Street Acquisitions confirm they SOLD the debt to AmSher Collection Services, or was the debt simply assigned to AmSher?
Based on what you have shared, and our discussions on the phone, AmSher cannot be trusted to tie a shoe. No documented agreement for settling means no payment. Period.
I would like to compile som
My account with Mainstreet Acquisition was assigned to AmSher to collect. Since AmSher has continued the phone calls where I have to say my name twice, then my SS #, then my DOB, then my address before they state who they are, I find them more than unable to tie a shoe. Since I was within the 30 day period since receiving the letter and since they claim to be following the FDCPA Rules on a constant basis, I sent a verification letter which they deny receiving. No surprise there to say the least. Also they insisted on going through the stupid Director of Operations regarding such a letter. So since they have chosen this path, and through my investigation I have found no rules regarding this concept through the FDCPA, I emailed this Director the letter that they claim to have never gotten. Since doing this, I have heard nothing from them. I have it amazing that these collection companies can continually call you and demand you verify your information before they verify who they are and what company they are calling from.
Ok this is getting so frustrating. Called Mainstreet Acquisition to get more information, only to be given to Jason Borkovec, the Director of Operations at AmSher. Needless to say, his nasty tone and his explanation of the interest being charged, “I needed to figure that out,” and which was commencing since February 2009, was surprising especially coming from a collection agency. Even if I did try and make payments on this, after my intial settlement was not accepted, would only cause the amount of the bill to rise. Do I attempt to make payments and only pay what I owe, or is there something else I can do? So beyond frustrated. This is the only company I seem to be having an issue with.
Also, I’m sorry about the delay in anwering.
Laurie, Your entire experience with AmSher collections is just odd. Most collection accounts and settlements can be done by each person. There are instances where having someone else step in is worth it. This may be one of those cases. Are you open to having someone else handle this for you?
I agree that my experience with this company is very odd. I have been able to work out payments and settlements on my own, but this company is difficult to work with. I would be willing to have someone else handle this, but the only way this will happen if it goes through the Director of Operations. It is my understanding that it had to be done this way so the company attorneys can look and respond to all requests. But, as of this date, AmSher still has not responded to my debt validation letter and I’m still trying to figure out at what percentage they are charging. Thank you in advance.
Hi Laurie. I also had the misfortune of speaking with Jason Borkovec, “Director of Operations.” This guy was the most obnoxious, idiotic, ignorant person that I’ve ever had the displeasure of speaking with. All I wanted was a receipt of the payments that I had made to them..I was told by Mr. Director that he couldn’t provide me with that unless he consulted with the company’s attorney and that I should consult my bank statements. Huh? Amsher is probably the most unprofessional company I’ve ever dealt with. Employees come off as being untrained and inept And they never return phone calls.
If you can Laurie please see if you can deal with Mainstream directly and have them place you with another agency. That’s what they did for me. And I made sure to let them know about Mr. Director’s unprofessionalism. You should do the same. Good luck to you.
OMG, I’m in a pickle now. Tried to talk with Mainstreet Acquisition but got no where of course. Now they have sent me to Frontier Financial Group who is 100 times worse than Amsher. They refuse to say who they are again until you spill all of your information…such as, ss#, dob, address and the like. They are now demanding a payment through my checking account and refuse to take payments through the mail with a certified bank check? Also, they are continually saying that if I don’t pay I will be sued! I’m current enrolled with CareOne and have sent out all the proposals….any help would be appreciated.
Thank you!
I have an outstanding debt with Continental Finance who sold this accout to a buyer by the name of Mainstreet Acquisition Corp. The original amount was for $789.51, but since then they are adding interest and late fees, so the bill is now $1,438.38. Received a letter from AmSher Collection Services, Inc. who demands the full amount over the phone now, with a $9.00 charge for the payment. I am trying to negogiate a settlement, but they refuse to put anything in writing until I give them my account information. Today, they called and stated “That if I wanted a settlement letter to be emailed to me, I would have to email my request to the Director of Operations because of FDCPA rules? Do I have it emailed and take it for the words written or do I write one myself and send it registered mail?
Laurie – When did you last make a payment to Continental Finance?
Sending a letter outlining the terms of a settlement agreement is standard. Any debt collection agency in business more than a week is used to this. Dealing with a collection agency like this means getting it in writing, and not emailed. Sending in an email request for a settlement letter to the operations manager is just weird. I do not know if you said something in your conversation that put the debt collector on his/her heals, and they just did not know how to handle it, or if they are a new collector just covering themselves, but it is odd.
If I were you, and I am serious, I would email the director of operations a link to this post and nothing else. If they want to get paid they should release the letter. I would not budge from getting the letter from them first. Especially given the behavior you outlined.
I had never made a payment to Continental Finance. They closed this account and sold my account to a debt buyer by the name of Mainstreet Acquisition Corp on February 2009. I made one payment to Mainstreet in 2011 and could not make any more payments. Now comes AmSher which was given the account to collect on April 21, 2013. AmSher began with calling my home number asking me my name, then repeating the same request without wanting to verify themselves. I only verified myself once and then demanded to know who they were and what company they were calling from. When I continued asking them what this was concerning after verifying myself once, they told me that they were following the rules of FDCPA and therefore were allowed to ask me to verify my name again and birthdate before they verified themselves. Being tired of this, I began recording the conversation and it ticked them off. Also, Mainstreet Acquisition Corp is continuing to add $24.00 in interest unless I set up payments over the phone because they are more secure, but also have a $9.00 charge per payment. They also got upset when I told them I wasn’t going to set up a payment this way because they seemed to be changing the rules as they went along. Got a call from them today saying that they were willing to send me a debt settlement letter in writing through fax and/or email, but I had to email the Operations Manager because they were so called being forced to follow the FDCPA because I had to give him permission in writing because they send out legal debt settlement letters and they had to follow the law. I did some research on FDCPA and I could not find anything regarding any of the issues described here except what they could and could not do. Any help would be appreciated
Michael, I received auto-Express letter from Dynamic Values Nationwide agency in San Marino, CA, with the bold letters: Stated: Court Case Notice. Had two phone calls, debt collectors told me to settle my account which they bought from the original company. He say’s was $4,000 but if you want to settle for less its only $1,020. Told him to send me an Itemized of the original bill and he says if I send that to you it would be $2,000 plus. What should I do need your help. Please let me know. Thanks! LA
Lorlina – If you want to settle with Dynamic Values Nationwide, asking for an outline of all charges is more like requesting debt validation than for them to send you a settlement letter. Do you recognize the original creditor and the debt as your own?
Michael
After rejecting my settlement offer, I finally arrived at an agreement for payment with the assigned collection agency. I verbally spelled out the terms of the contract, which were acceptable to them; however when I asked them to send me confirmation of the pay plan, she said no formal written agreement would be forthcoming and that I just send the money and she would send an email once my payment was received. Michael, my question is, are the Collection companies required to acknowledge Payment arrangements in
writing (Contract) or else what protections do I have. The balance amount has changed 2x. I don’t trust them. Thanks M.
Michael – debt collectors and collection agencies are not required to send a written settlement letter or agreement in most instances. Your protection is that you do not agree to, or make a settlement payment, until you have it documented (there are limited exceptions when dealing with your original creditor). Who is the assigned collection agency you are dealing with?
My wife has Dillars as a creditor. We initiated a settlement request with them and they accepted an offer. I have dealt with a few creditors before and thought it odd because they will not send a letter until after pmt is made. My wife has spoken with a Supervisor as well and they all confirm that they dont offer settlement letters as document proof until pmt is applied. I advised my wife we would hold off payment until more info was gathered. Do you have any info regarding this situation?
Aaron – No settlement letter or written agreement means you have not reached a settlement. There are times where you can set up a future payment date, say 10 to 14 days out, with the expectation that you will have the settlement letter in hand to review prior to the payment pull date. This method for getting the letter kicked loose is more likely with an original creditor, and never something to entertain if you are dealing with an outside debt collection agency.
Are you speaking directly with Dillards, or a debt collector?
Sorry for the delay. It turns out my wife has been speaking with a collection agency.
No documented agreement about the terms of the settlement means no payment. There are very limited exceptions to this rule. What is the name of the collection agency?
The most recent communications came from my wife speaking with Dillards directly confirming the same thing about policy. They assured her of a settlement letter 7-10 days after payment
A collection agencies assurances do not go far. If I understand your comment correctly, Dillard’s collection department assured a letter of satisfaction would be released after payment as well, and it may well be, but there are enough instances of settlements not going according to plan that I caution against making payments without documentation.
An alternative would be to record the deal and agreement for documentation over the phone with both the agency and Dillard’s. Letting them know you are doing so as a result of their policy to not release the terms in writing.
I am asking for the name of the collection agency in the event I recognize the agency as one that plays fast and loose.
My wife owed about $10,000 in credit card debt and hired a debt consolidation company to negotiate a pay off for each of her accounts (about 5 cards). The monthly payment plan was over a two year time period. They stated that once the agreed payments were paid in full that all accounts would be settled. They told us that if we received any bills in the mail from the CC companies to fax the statements to them. Once the account was paid in full, they told us that all the cards debts were paid off and closed except for one (which had the most money owed on it from the start). Because of penalties and interest accruing over the two years, the debt now for this one account was over $14,000 and we were sued directly by the credit card company and had to negotiate another settlement independently with them which took another 9 months to pay off. When we tried to contact the debt consolidation company that originally should have been negotiating this for us we found out they had laid off a bunch of people including the person handling my wife’s account and had moved, yet I think they are still in business. Early on, they also sold our debt consolidation account to another company (which was almost as if the representative we first had the agreement with took the account with her when she changed jobs). Since we paid a fee for them to help us thru this process and they neglected to settle all the accounts, is there anything we can do about this? We kept all the paperwork and emails thru this whole process. Thanks.
JM – If I understand your comment correctly, you paid for a settlement service on the one larger account that they did not resolve for you. Is there a part of your agreement with the settlement firm that speaks to how the fees would be considered earned? Were your fees being paid in advance, or were fees earned once each debt was resolved by the company?
What is the name of the debt consolidation company you used?
I should ask if you have copies of all settlement letters and payment agreements for the accounts the company did complete for you?
Micheal,
My wife paid a fee every month (instalments) to the debt consolidation company to settle a number of CC accounts, but the biggest one wasn’t settled at the start and it grew as time went on as they were working on the other accounts. Yes, we have settlement letters for all the accounts that were resolved. Started with Simon & Bocksch which sold it off to Lloyd Ward & Associates. The first agreement may have even been with another company when it started out prior to S&B.
JM – Your original agreement with the settlement company should outline what options you have with accounts not settled. I know the two companies you mentioned. Both charged fees in advance of service. It may be tough to get any money returned to you from the one still open. Have you requested the fees for the account you settled on your own be returned to you?
A lawsuit has been filed against me from the attorneys at Midland Funding.
I have negotiated a payout prior to any court appearances. They will accept a check by phone in which they take 45 days to send me a receipt of payment or they will accept my debit card in which I will receive a receipt within 3 days. I would like to get a receipt promptly, but does this matter since I will have the settlement letter with the payout price and a bank statement showing that release of funds?
SV – A receipt for payment after it is received and processed is nice, but in my experience not necessary. Your reason for wanting a receipt are met when you have a settlement agreement in writing before making the payment, where the settlement letter clearly outlines what will be paid and by what date, either in one payment, or over several months of payments. You keep that letter and your record of payments in a safe place. Your bank statements will act as your receipt should there come a time you need to show proof of payment if something comes up down the road.
Thank you. Your site is invaluable!
Also, they claim the dismissal of the case can take up to 45 days depending on how busy the court is with paperwork. Even though I will be settling this with a one time payment, do I need to file anything with the court as far as a response to the summons or can I watch and wait as long as I have made my payment?
SV – It really should not take 45 days to file a voluntary dismissal with the court based on how busy the courts are. Docs get filed every day in court houses, busy or not. What does take a little time is for funds to clear and for the law firm to calendar work. It is also fairly common to tell you “as much as” 45 days, but have it be completed in a matter of a couple weeks.
Watch the court docket and make sure they followed through within the 45 days, if not, post an update and lets take it from there. It will be simple to prod the finalization if necessary, but no need to go into that, unless it becomes necessary (and I don’t think it will).
Oh…. one more thing. I asked if they’d do “pay for delete.” He claimed he didn’t have the ability as HHL didn’t do any reporting to the credit bureaus-which does make sense-but couldn’t he ask Portfolio to include that as part of the settlement? Otherwise, her credit is damaged for the next several years regardless with both the original creditor and Portfolio showing derogatory info, yet I’m still settling it for an awfully high amount. (Though I feel compelled to do so as based on what I’ve read HHL will go for a judgement.)
Hayt Hayt and Landau does not do the reporting, and they will not get Portfolio Recovery to agree to any reporting other than updating the account as paid and a zero balance showing (which they have to do anyway). Her credit will bounce back quicker than you may think. Especially by taking smart steps to improve and restore credit deliberately.
Hi Michael,
Just a quick follow up to let you know we received the acct settled/zero balance letter this week from Hyat, Hyat & Landau and all is well. For what it’s worth, my experience was that they were fine to deal with, professional, respectful etc. Not what I ‘d expected based on what I ‘d read online prior to reaching out to them. Thank you for your help!
MC – Thank YOU for posting the update. It is also good to hear the experience you had with Hyat-Hyat-Landau was amicable. There are certainly topical debt collection websites and articles full of hyperbole. Many with a tendency to over complicate what is a relatively straight forward process. Out of many thousands of conversations with a debt collector, I have only ever hung up from one and thought to myself “I would have preferred to have gone my whole life without that conversation”.
You’re welcome!!! If you don’t mind, another quick question?! I was thinking I should have my daughter apply for a new credit card with the intention of rebuilding her now damaged credit. My thoughts were that she wouldn’t be turned down as I’d co-sign (my score is 801, we have zero debt, we own both our homes and vehicles-no mortgages, no loans). Is that a good idea? (Yes, she can be trusted to not take advantage!) Fyi, she has no debt either, no car loan, no mtg. Her only other account besides CareCredit is a Discover card which she’s had for approx 6 years. It presently has a 0 balance and was always paid on time.
MC – Either as an alternative, or in addition to a new account, consider adding her as an authorized user to one (or two) of your existing and longest established credit cards.
Do you both bank at the same place?
No, we don’t use the same bank and that is a GREAT idea, though I only have one major credit card thru USAA and I only use that once a year for travel and then pay it in full. Would that still help her? It does have a high credit line and I’ve had it for years.
The limit and length of time established for the one account will be good. Adding an account of her own will accent that. Diversity of credit after establishing revolving accounts would be next (installment loan, auto loan), but when she has stable income.
She may not need you to cosign for a new revolving account. I like https://www.credit.com/credit-cards/ as a matching tool for accounts that are more likely to be approved for someone on every rung of the credit ladder.
I would also encourage you to speak with USAA about some of their credit products, as there are some good ones their for her too.
Thank you for the link! Yes, USAA has a secured card that may be a good option if necessary. It just occurred to me that I failed to mention that she is now married. Is that a reason to not add her to my account? Or to not co-sign if necessary? Fyi, they have no joint credit and he has no debt either. Other than her CareCredit acct, they’ve been doing (and believe in) “pay as we go” which is a good thing. In fact, she only has the Discover card because it was offered pre-approved when she was all of 18-19 years old, so it seemed like a good idea to accept it to establish credit. (Scary, she was sent multiple pre- approved offers back then as a student with no income!) Regarding the Discover, it generally has a zero balance as she doesn’t really use it. Maybe once/ twice a year she’ll put some school fees on it but then pay it off in 60 days or so. Would more activity on the card help her rebuild faster?
MC – Married status would not change the perspective of building an individual credit profile.
Here is how I see it:
Has one derogatory collection account that has now been resolved. Has one positive Discover card trade line. Get set up as an authorized user on your USAA, wait 3 months after that shows up on her credit. Apply for an unsecured card on her own using a matching tool like linked above. Within the next 6 to 12 months find a meaningful way to establish an installment loan trade line (car, pop up camper trailer if your into that, etc), and here is where you would be helpful as a cosigner if needed.
It sounds like your son in law also needs to establish credit. He can start off using a matching tool like through credit.com, or apply where he currently banks. If income is steady, they could apply for an installment loan together in the next 6 to 12 months without a cosigner (though they may get a better interest rate with one).
More activity on the Discover card will not necessarily help boost a credit score or profile, but buying something with the card once a month that you were going to spend money on anyway (lunch, tank of gas, bag of groceries etc) instead of using cash, and then paying the bill off every month is a good safe method to show consistent credit activity.
Hi,
I’m in the process of negotiating a settlement for our young adult daughter. The original creditor was CareCredit. Initial credit granted was $3,500. The original terms were something like 6 or 12 mo’s same as cash. Though, it mattered not, as right out of the gate they told my daughter her first pmt was late and that she lost the introductory apr. She called them when she didn’t receive her first bill and they said she had requested online billing, though she insists she didn’t and can find nowhere in her paperwork where this is stated. She can never resolve the issue with the apr and begins paying the $100 per month with the goal of doubling/tripling pmts and just getting it paid off. Each month she pays the acct on or before the due date online. (I witnessed this!!) Despite paying a few days early or on time, she keeps getting hit with $35 late fees! (A common complaint w/Care Credit all over the net!) Month after month after month. She tries calling for an explanation and to resolve, even asking for full payoff amounts so she can settle but those amounts are ever-changing and not in an insignificant way!! She gets transferred, disconnected , left on hold for 20-3o+ minutes or ends up trying to communicate with reps that she cannot understand and this goes on!! (That complaint, also all over the net!) Other than the occasional venting about what a nightmare they’ve been to deal with she doesn’t tell us (her parents) what has been going on as she feels it’s her responsibility to deal with. After 3 years of payments, the apr continues to rise and there is no change in the balance. As a matter of conversation I recently ask her where she is with this “nightmare” account of hers. She confesses that after her hours were cut significantly at work, she stopped paying. The acct was referred to Portfolio Recovery for collection. Portfolio says she owes $2800(!!) but will settle for $1,800. She explained her payment history but was basically told,”oh well, that’s what you owe.” She takes no further action as she has no money and the acct gets sent on to Hyat Hyat and Landrau Law Firm. She received the first letter from them yesterday. (Despite the letter stating something to the effect “no attorney has reviewed your acct for specifics” I confirm they are in fact a legit law firm licensed to do business in Fla where she resides. I also confirm via her local court records search, as suspected, they have yet to file anything. ) She contacts the firm and authorizes them to speak with me. I called them today and explained the amount is far in excess of what she says she owes based on her own calculations and pmt records. “Oh well, this is the info we have” and they offer to settle for $2,800, then go to $2,400. I told them Portfolio originally offered $1,800 and that essentially… my daughter has a part-time job, no money, no assets and unless she hits the lotto this weekend, her situation will not change in the foreseeable future. We go in circles and their last and final offer to settle is $1,717. I ask him to put it in writing. He tells me he isn’t authorized to offer this reduced amount and that he must get an approval to do so. He tells me, if approved, he will email me the settlement offer. Based on what I’ve read about Hyat Hyat and Landau online, I’m a nervous wreck! Everything is negative, “scammers”, “not to be be trusted” etc etc. So, if you’d be so kind, a few questions… Is it okay for them to email me the settlement offer? (You recommended to someone else that it be faxed.) And because of their reputation online, should I ask for anything above and beyond what a typical settlement letter should include? I’m losing sleep over this… any help is greatly appreciated. Thanks!!
M.C. – First, be sure and get some sleep. No part of this is worth that. It may sound simple coming from someone who has been at this type of thing professionally for a long time, but it really is just math. You get them to agree to the math that works for you and your daughter, and they, being debt collectors, determine if that amount that works for you is as much as they think they can get, or are willing to accept.
A settlement letter sent via email as an attachment is not a problem. It can be printed and saved etc. An agreement to settle in the text of an email is lacking qualities you would want in a written settlement letter if push ever came to shove where you would need it. Fax and mail is the most common way to receive a settlement letter. I have done email attachments.
Portfolio Recovery Associates has a system with 3rd party debt settlement companies where the verification of a settlement comes in the form of text contained in an email. I do not like the practice and would never accept that for a customer, nor would I encourage someone to accept it in their DIY efforts.
Hayt Hayt and Landau may indeed need to get approval on the settlement amount from Portfolio Recovery Assoc. But the amount they are sticking to in the settlement is not that drastic a reduction, and Portfolio Recovery approves that type of discount on a fairly regular basis. If it is not approved it will be because they think they can get more.
Here is my suggestion: If they approve and you can fund the 1700 offer, get the agreement to settle in writing (not text in the message body of an email), and fund it. If they waffle in any way, especially on the written settlement letter, pass on the deal. Reach out to them middle of the month or nearer the 20th and start negotiations anew.
Yes, Hayt Hayt and Landau does sue for collection. It is likely that Portfolio Recovery Associates have given them authorization to sue if need be. If that occurs, the same amount of money you have available to settle this old Care Credit debt can be used to retain an experienced debt collection defense attorney (even less than 1700). Debt buyers have a tough time winning their claims out in court when you have experienced representation.
Let me know how things develop in a comment reply. I will offer my feedback and can refer you to helpful resources if need be.
Get good sleep. One way or another you will get this dealt with, and help your daughter.
What you do is invaluable, I’ll sleep tonight, thank you so much!! Just for clarification… I can accept the settlement letter if it comes as an attachment? (This is assuming it has all necessary language.) And regarding going back to them if we can’t get agree now… I guess I was concerned about them immediately filing, possibly unbenownst to her, as there are several stories online where people had complained that they never rec’d a summons but only found a suit had been filed when they learned of a judgement against them.
Fyi, no the $1,700 is not a problem (our daughter knows that which is why I wish she would’ve come to us sooner) but I started to worry that I had hastily agreed to too much. Thank you for letting me know it wasn’t unreasonable to just pay it! 😉
M.C. The settlement letter you would get as an attachment to an email will, in all likelihood, be the same letter you would get over the fax or through the mail. It is actually not that common, especially with a law firm, to get the letter attached in an email. It’s an option though.
The risk of suit if you are unable to agree to the settlement, and get the written agreement, is real, but not the end of the process. If the deal does not get done, check the court every 10 or so days to see if they filed. That way your daughter cannot be caught by surprise like you have read about.
If paying it in full, you still need the agreement in the form of a letter outlining this. It is the only thing (along with proof of payment) that you should need to confront any mistake if the debt somehow mistakenly ends up in another debt collectors lap (it happens), or to get the credit report updates if PRA fails too (also happens).
Thanks so much for the clarification. Hopefully, this gets resolved quickly. I’ll update (or be back for help!) soon.
Hi again,
I received the settlement letter today via an email attachment. Boiler plate language ” Letter shall confirm that we can settle the above referenced file for $1717″ etc etc. The letter is from HHL and it lists Portfolio Recovery as their client but original creditor is shown as “Atlantic Credit & Finance/CareCredit.” CareCredit was the original creditor but my daughter has no idea who Atlantic is? She says the original agreement said CareCredit/GE Capital. From what I could find online, it appears they are another collection agency. My dtr says she’s never heard of them or from them and that she was only contacted by Portfolio then HHL. Any idea why they’d be listed? And do I need to be concerned that now they’ll show up on her credit report as a collection acct? Any help/info is greatly appreciated. Thanks!
M.C. – Atlantic Credit and Finance is indeed a debt collector/debt buyer. They may have purchased the rights to the CareCredit debt followed by PRA, or some variation of legal rights to the debt occurred along the way to resolving it now. Your settlement letter may just be reflecting that chain.
Not knowing what appears on her credit report regarding this account, I cannot really offer meaningful feedback about Atlantic Credit showing up later. You could get a copy of her 3 credit report and cross reference all entries and inquires regarding this account. If ACF is not on there now, I doubt they will show up later.
At this point she has only ordered one copy of her credit report and Atlantic is not showing on it. Oddly enough, neither is the original Care Credit account, only the Portfolio collection acct. Though I realize Care Credit may be showing on the other two bureaus reports. I thought we’d give it 45 days or so, then order all three, see what’s on them and go from there. Thanks again!!
Hi Micheal,
I had a Bestbuy Credit card owned by Capitalone which is now in debt collection with IQOR Allied Interstate. My balance owed was 1066. Before reading your website, I agreed to pay them $614 with a down payment of $50 with my debit card. With a balance of $564. After reading your website, I immediately called my debit card and cancelled. Then called Allied and asked for an address to send them a letter so I could get the settlement in writing. The associate advised they don’t have an address to give me and it was unlawful to do so. Then she advised if she gave me the address it would totally void out our previous agreement and i would have to pay the balance of $1016.
What is my next recourse? I googled the address for Allied it came up an address in Ohio from the BBB website but the associate was calling from New Jersey. Should I send the letter to the address from BBB website? Should I continue to engage the associates when they call back?
PW – I am at a loss for why a debt collector at Allied Interstate LLC would tell you it is unlawful to give you an address. Whether this is fair to say about Allied Interstate collections or not, when I hear something like this I assume that Allied had no intention of settling fairly with you.
Allied Interstate LLC is a large debt collector. Settlement letters and written agreements are part of their everyday work flow. I will say that your suggestion that you create and send them a settlement letter is not part of their normal work flow. You do not a settlement letter on your letter head, you want one on theirs, so make them send one of theirs to you via mail and/or fax. Believe me, they can whip one up rapidly. If they refuse to, they never had a legitimate intention of settling with you.
How do I request a settlement with a collage and receive official collage transcripts.
My daughter was attending Collage of Saint Elizabeth NJ, I went through a divorce and I couldnt afford the collage, school loans were denied and she was asked to leave school.
My daughter owes the school 15,500 they turned her account to collection agency, collection agency bill is for 19,500.00 after many years of struggles I would like to settle the account with the school and receive the official transcripts. Is this possible?
Basi – Your options for student loans are limited and will depend on the type of loan. If the loan is backed by the federal government here are 2 resources for more information:
https://studentaid.ed.gov/repay-loans/default/get-out
https://www.studentloanborrowerassistance.org/default-and-delinquency/repayment-get-out-of-default/
Will a credit card company still be willing to work out a debt settlement AFTER they have filed suit for debt payment? Or are all my options exhausted once they’ve filed suit?
LM – You can still settle your credit card debt after being sued. See this post for more: https://consumerrecoverynetwork.com/question/can-you-negotiate-and-settle-a-credit-card-debt-if-you-are-being-sued/
Once sued, you will not be negotiating with the credit card company, but can work with the debt collection attorney doing the suing.
I live in Minnesota and received a served Summons and Complaint for my husband on the evening of Monday, May 16 for a credit card debt that I thought was paid in full almost two years ago. The Summons and Complaint was from Rodenburg Law Firm on behalf of Portfolio Recovery Associates, LLC. When I checked our bank account records it appears the final payment for the debt never went through so I panicked, called Rodenburg Law Firm and asked to talk to the attorney, they said I would have to talk to the Legal Account Manager instead. I finally got a hold of the legal account manager and said I would like to settle this case to avoid going to court and paid the requested amount on the complaint in full. I received a confirmation number and watched our bank account for the funds to be pulled. I can see that as of Friday, May 20th the funds were pulled for the settlement. I called the Legal Account Manager and demanded a Settlement letter dismissing the lawsuit be sent and she said a letter would be mailed out within 2 weeks. She said I could fax proof of payment to the attorney to request the settlement letter be sent sooner. I sent that fax today. What else can I do to ensure I get this settlement/dismissal letter before the 20 days are up that we needed to respond to the summons and complaint by?
You can see from this video about settling with PRA, I find them to be one of the worst debt collectors out there when it comes to their document and agreement policies.
If you do not have the agreed upon documentation in the time frame they suggested, or there are any issues with how this all gets finalized I would suggest you file a complaint against PRA with the CFPB.
I sent out settlement offer letters 30 days ago to the date, 2 of them were delivered and accepted but 1 was left a notice and still has not been delivered but recently sent me a statement saying they don’t understand why I’m refusing to pay this debt (dated later than my settlement letter). What should I do about these that have not responded to my letters? And the one that hasn’t been accepted yet but it was sent out, does that mean I have to start over or the 30 day thing still applies??
RS – I need to know a little bit more of what you have going on. Who are the debt collection agencies, or creditors, that you sent out settlement offer letters to? Post a comment reply with answers and I will be better able to respond with meaningful feedback.
They are all for medical bills from my husband several years ago
Rs – Sending your own offer letters to settle debt is not how the vast majority of deals get done. Communicating direct with the lender, in this case a service provider, using the phone, is the most productive approach. I want to help you reach your goals of settling the medical debts, but I have many questions. Those questions are best answered on one of our existing pages about medical debt. Here is a good one to post some more details to if you are up to it: https://consumerrecoverynetwork.com/question/medical-bills-collection-agency-settle-make-payments/
It would be great if you would post more details in a comment on the above linked page.
How long ago were the debts incurred?
What state do you live in?
Were any part of the bills covered by insurance?
What are the amounts owed, and what is it you stating you are prepared to pay in your settlement offer lenders you are sending?
You mentioned that you are concerned about what to do after 30 days of sending the settlement letter in your above comment. There is no requirement for anyone to respond to a settlement offer you mail them. You may be referring to something more like a written request that a debt be validated. If so, we can get into that on the other page.
Hi Michael,
Sent you a copy of the settlement agreement from JC Christensen. Kindly confirm if such document is a good one? If you think its good enough, should I opt to pay over the phone for easy payment by giving out my checking account routing number? Should I request them to give me a letter that said account was already paid and settled? Thank you for taking time to answer all my questions, really appreciated it very much.
Joe – I reviewed the settlement letter you sent me for the Cavalry account being collected by JC Christensen. It contains what you would want to see, or would need, later if any issues arise. I would not have any problem making the payment over the phone if I were you. I assume you are asking about requesting a different settlement agreement about the account being paid for credit reporting purposes. That is unnecessary. You are paying it. If Cavalry has an entry on your credit report now, pull copies of your credit report in 60 days and be sure that it is showing zero due. If it still shows an amount owed, its an easy enough fix. Just post an update about that and we can go from there.
That was your last account right? Congrats!!
Hi Michael,
Paid the settlement amount already. Yes this is my last account though the other one is in conditional settlement up until June of 2013 upon satisfaction of full payment. Will definitely follow your advice to check my credit report if this account will zero out. I was told by JC Christensen to call them after April 18, 2013 to follow up the letter on full settlement of the account.
A million thanks to you for all your help and advices regarding all my debt problems.
If anything I could help you just email me.
Thanks again
Joe – My pleasure. If you are up to it you can always leave a comment on our review page: https://consumerrecoverynetwork.com/debt-relief-system-customer-reviews/
I created that page years back. I asked members to post what ever they cared to after they completed their goals with us. We then switched to questionnaire/feedback forms and I stopped directing people to the page. The page could use some life… I should probably point more site readers we help (non paying members) to the review page.
Hi Michael,
I’m back with a new issue that I want to consult with you. You’ve been a great help to me in my last problem having been sued due to one of my credit card debts. Your advice and helpful insights encouraged me to face and work on resolving the matter.
Now, I have one more defaulted credit card that I want to settle. Original creditor is WAMU. Previous collection agencies were Cavalry Portfolio and Central Portfolio Control. Now, JC Christensen and Associates called me up and offered a settlement. How would I know that they are now the legitimate owner of the account. I was asking for a settlement agreement but the agent told me they will send through email. I requested an agreement in writing with signature through mail but told me it would take 30 days. Should I settle for an agreement through email?
Also, I want to pay them by check but instead the agent wanted me just to provide the routing number of our checking account to facilitate the payment. What do you think is the safest way at the same time will protect my rights in negotiating and settling this account. Thank you very much.
Joe – A settlement letter with an account like this is a MUST. An email will not cut it. JC Christensen and Associates is a debt collector who settles debts in the normal course of business. They have a settlement letter template they will be using that does not take a month to fill in. You can ask them to fax it to you instead of mailing it. Faxing settlement letters is a normal occurrence (though there are some creditors and collectors that insist on mailing – but it still does not take a month).
Once you have the settlement agreement in hand, paying the settlement can be done through a check by phone. I understand why you would exercise caution, and if you absolutely prefer to pay by check, stick to your guns and let them know you will send via fedex or UPS and the check will be a money order or certified check. If you do this, I would encourage you to get the certified check issued from your own bank with the amount drafted from your bank account for later tracking and proof of payment ease, should you ever need it. But again, paying via a check by phone method after you have a letter in hand is much more common nowadays and also provides you ready access to proof of timely payment should the need for it arise.
Michael,
Once again, thank you very much for your timely response and informative advice. Can’t thank you enough for all the help you have extended to me. Will definitely follow everything you have told me and keep you updated for the settlement of this account.
You bet Joe. I look forward to congratulating you with successfully settling all of your debts when you get the settlement letter on this JC Christensen Cavalry account.
With all due respect, Michael, that was bad advice on paying using a check by phone, or really ANYTHING that gives them access to your personal accounts. Once they have the account numbers htey can access your account any time they want, and they will do it. It’s like giving them an entire checkbook of blank, signed checks. It will then be up to YOU to prove that you did not give them this access, and that will cost you more time and money than most people are willing to spend. Also, if they decide to take more than you agreed to, and the ACH “bounces”, some states will treat this as a “bad check”, which opens up a whole new can of worms, and gives them rights to collect from you and makes it next to impossible for you to fight. in SC, they can seek treble damages, and will probably win. In Texas they can actually put you in PRISON for a bounced check – and they do it.
A buch better way is using the certified check as you mentioned. Draft it from your account so it leaves a paper trail, make it from your bank so it is easier for you to get verification that they cashed it and NEVER, EVER send them a dime until you have the negotiated letter in hand that has ALL of your terms in it on their letterhead and signed by someone who has teh authority to sign it. They will provide it if they know they won’t get the money without it.
David – I understand the caution about payments. My favored way for paying the deals people negotiate, and once documented, is from a specific set aside account more fully outlined here: https://consumerrecoverynetwork.com/paying-your-credit-card-debt-settlements/
When dealing with legitimate and recognizable debt collectors these days, the payment and access to bank account information concerns are a bit overblown. Your account information is something not to be used without an agreement in place, but once that is done, any payment bad behavior can be immediately addressed with a phone call to the collection company, and if that does not yield quick results, filing complaints with the CFPB. Again, this is when dealing with legitimate collectors who are not going to risk their company, and many thousands of dollars of compliance money, over a single collection account. Debt collection scammers are another matter entirely. And scams do exist to pluck money from bank accounts.
Encouraging people to hold out for a letter with all of their terms on it is not realistic. Too many people think they are going to get debt collector agreements to include that they are going to delete any negative credit reporting, or that the debt collector is going to go against established IRS guidance on issuing a 1099c.
Hi Michael,
I received a debt settlement letter from an attorney for the original creditor. There are two accounts involved. Should I be concerned about any of these issues:
Both amounts on the complaint are different than the amounts in the letter. One is off by a few pennies and the other off by a couple of dollars. The account numbers referenced are NOT my credit card account numbers. They are internal account numbers for the law firm or the bank.
The letter mentions that I am obligated to pay the full amounts plus interest and attorney fees. In exchange for my payment by the deadline, then both accounts will be satisfied paid in full – the one current default judgment cancelled.
The attorney asked me to send payment in his self addressed stamped envelope. I am going to send it by ups so that they can’t say they didn’t receive it by the deadline.
Is this normal? I don’t want them to cash my $10,000 and check and then later come back to say I signed an agreement saying I owe the full balances plus interest and attorney fees and the accounts referenced were maybe not mine. Only one has account has a judgment.
And to add – it says “this settlement agreement is made effective the ____ day of August 2014. It is left blank. I’m worried if I add the date that may alter the agreement and make it void. It is already signed by the bank. Would there be a chance they would cash the check and say that I altered the agreement so it is void?
These days BJ, with the CFPB paying such close attention to banks and debt collectors, even if they did try to pull something (it would be more from human error than a con), you can fix this stuff up in a matter of weeks. The kind of thing you are concerned about happening – some kind of debt settlement bait and switch – would likely be deemed unfair and deceptive. The bank, and the attorney collector working for the bank, do not want that kind of scrutiny.
If something does happen, post about it, and lets go from there.
What is the precise verbiage used in the part where they are saying ” In exchange for my payment by the deadline, then both accounts will be satisfied paid in full”.
Generally speaking, what you summarize is pretty normal. Creditors do sometimes use different internal numbers after your account goes into default. Who is the creditor? Who is the attorney firm you negotiated this with?
First Citizens Bank. Attorney firm is Hatch, Little, Bunn in NC. Exact verbiage is: “The bank agrees, upon receipt of said funds, to mark the credit card accounts “Paid in Full and Satisified”, to cancel the judgement in AccountXXXXX, and to inform the appropriate credit agencies that the obligation of the Debtors under these accounts had been paid and satisfied.”
The attorney said he would dismiss the pending lawsuit with prejudice but he does not specifically include this in the above. He is also including this “BJ is obligated to the bank in the original principal sum of $10,562.47 plus interest and legal reimbursement under a cc agreement denoted as accountXXXXX.” Is it normal to have to sign agreeing to this? This is regarding the one pending lawsuit.
Also, it is not dated and the last page says “the parties have executed this agreement under seal prescribed by law as of the day and year first above written. The first paragraph has ____ August, 2014. No day is filled in. I don’t want to send a check for $10,000 and then find out the contract is not valid. Or, if I enter the date, won’t be altering the contract and they can say “I made changes to it” and it is not valid?
The reason I am so concerned is this bank is known for doing underhanded things to even others I know. They once sent me a letter when I used to bank with them warning me of how they were going to swipe money from my bank accounts. The postmark on the envelope was after the date they swiped the money.
One of the lawsuits is against the business and the attorney in writing agreed to give me a 30 day extension in order to work out an agreement instead of being forced to use the funds to hire an attorney to represent the corp. Well, he lied and got the default judgment.
Other people I know have also received letters where the bank specifically holds them and sends them after the fact. I could go on and on with the horror stories about them in my area.
Is it going to anger the attorney if we ask him to date the settlement agreement and add in our account numbers for future reference. And to ask him to specifically address dismissing the lawsuit with prejudice?
I will post the settlement percentages and amounts for you to add to your list once this is all done next week…hopefully.
Thanks!
You should not care much about the attorney getting pissed about you protecting your own interests. And thanks for the follow up details, it helps.
I know a few people at the North Carolina AG office who take debt collection shenanigans pretty seriously too, so add complaints to the your AG along with complaints filed with the CFPB to the list (but as pertains to consumer debts, not the business ones).
It would not hurt to consult with your own attorney on this stuff.
The sad thing is I am here because I am not getting clear answers from my attorney. I hired one just to review the settle agreement and all he says it is fine and you worry too much.
He hasn’t specifically addressed my questions and doesn’t want to get involved with the other attorney. He said to write in my own account numbers and the date and initial and sign it. I have asked twice if this technically voids the contract (since the other party has already signed) and he doesn’t reply to that question. He also hasn’t addressed the “with prejudice” part. And he hasn’t answered the part of why I am being asked to “admit” to a pending lawsuit.
Thanks for your replies today.
I am not an attorney, and what I share should not be considered as legal advice.
In my opinion, you are worrying too much, at least about this one (there are reasons to worry about collectors and debt negotiation).
I too would write in my own account details, dates, etc. If they accept the agreement back, and cash the check, I will hold them to it if there were any later developments.
There is really no reason to get hung up on the with prejudice part. The agreement and payment would resolve the account. Any later lawsuit would create a situation where I would sue for FDCPA violations. I have just the consumer attorney to refer you to if that should be the case.
Like I said, the CFPB and the NC attorney generals office care about how debt collectors deal with you. If there is an unfair or abusive practice, the CFPB is rooting those out, or solving the one offs with consumers in a couple week turn around right now. None of this means you do not have to be careful. You still do, but I would proceed with what you have if I were you, and given the information I have right now.
Michael,
I want to send you details of my settlements so you can add the info to your list. Is there an email address I can send it to? Or am I supposed to post everything publicly?
If you are not sending the document as an attachment for me to review, just post the verbiage and your concerns herein the comments.
If you want to get me a scanned copy of the letter, send it to the email address you get these comment notifications from. That address comes directly to me.
Hi, I’m here on the behalf of my sister who had recieved a letter from MCM and they want 708.71 abut the current balance is 1,181.19. The payment due was 9-7-12. They said they have a great new offer for NEW customers and said they purchased YOUR new t-mobile account. They said they’d be able to offer a discount of 40% off the current balance IF WE RECIEVE PAYMENT BY 9-7-12
“what in it for YOU? Once MCM recieves your payment of $708.71, we will: Notify the credit bureous that the debt is “paid in full. ” “immediatly stop all recovery activity on this account.
My question is..how do you know if you really owe them and second if they are a real debt collection agency? I actually went down to the t-mobile place and asked them but i don’t get why its so high..
Linda – The settlement letter you refer to is a common offer letter from a collection agency. I can assure you MCM (Midland Credit Management) is a real collection agency. They are part of the largest collection outfit in the nation. That letter is dated from last September and not valid anymore, so do not act on it. Your sister will need to call and negotiate the same, or better settlement deal, and get a new settlement letter sent before sending in payment. Your sister can authorize you to speak on her behalf (if she is not up to it), either verbally with you on the phone, or in a letter that can be mailed or faxed in. You would call in to get the fax number to send the authorization letter signed by your sister. Then you could negotiate with MCM and get the settlement letter sent or faxed.
If you want to make certain Midland Credit Management is legitimately collecting on the Tmobile account, your sister can call in to Tmobile and verify that Midland bought it. Just be aware that it is likely “Midland Funding” that bought it. MCM is part of the Midland brand. See this post for more detail: Midland Funding, MCM, Encore Capital