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
I’m currently dealing with a medical debt collection company. My wages have been garnished for the last 6 months to the point I’m having a hard time getting through the month. I reached out to family and received some funds to help settle this debt. I offered them approx. 55% of the debt and they denied it. I offered the money as a lump sum to remove my garnishment and do monthly payments again. When I said I would agree to the terms as long as they sent me a letter stating our agreement. He refused. Said absolutely not. I did not give them the money.. Seems EXTREMELY fishy that he would deny a lump sum payment because I wanted documentation. He said, “all our calls are recorded..”
The company’s name is A1 Collections
At this rate it is going to take 5 years to pay them off.. I’m not going to hand them large amounts of money with my covering my interests too.
How much is the debt? What amount of money do you have left to live on after the garnishment, and all normal household bills are paid each month? Does your income fluctuate, or is it static?
The debt is for 6800 and some change. I’m only working 15 hours a week at 10.00 an hour. My checks are a little less than 650.00 before garnishment. They take about 150.00 every month for garnishment. After rent, insurance, and my phone bill…I’m completely broke. My paychecks are once a month. I’ve been looking for more work, it’s a bit of a struggle because I’m entirely concerned of someone’s impression of me with having my wages garnished. They collection company doesn’t care. They don’t want to compromise.
If it were me I would file with your court to contest the garnishment as creating an undue hardship. Given what you shared, you would likely be able to get the garnishment stopped by the court. Once that happens, I would reengage with the the collector at A1 collections. You may find them more willing to follow through with the settlement documentation and a fair lump sum pay off deal then.
I have asked the collection agency to send me a monthly statement of what is owed and the balance after payment, like any bill …. electric, car, etc… I’m just getting the run around. Am I entitled to get a monthly statement?
Unfortunately, in most states, no, you cannot force the statements out of them. Who is the collection agency you are dealing with?
Hi Michael, thank you for responding. The collectors are Central Portfolio control. I’m making monthly payments and wanted proof of the payments and balance. Paula
Hi James!
I want to settle an account I have with Carter-Young (debt collectors). The original account was with Hargray, cable company. The amount $1222. I have tried to get them to send me a settlement agreement letter, but they refuse to send me one prior to paying the settlement, which hasn’t been made yet because they stated that they won’t send the letter. What do you think is a good settlement amount? And what are some tactics I could use to ensure my safety in making the deal?
My apologies, Michael, not James! Lol
I would record any phone call with them and tell them why you are recording. Save the recording for ever, along with proof of payment.
Utility companies do not often offer great settlements. You may find 50% is as good as it gets, or you may be able to do better. What have they said they would accept so far?
I initially went with a $400 settlement. I know that’s low compared to amount owed, but that is about what the final bill with the company was when I had to end the contract about 4 months early. I returned the equipment to the store, and the next bill I’d gotten was over $800 more totaling out to $1222! I’ve been disputing it for a few years now because the additional $800 was because they claimed they never received the equipment.
That same thing happened to me once too.
Did they counter offer?
No, because as I continued to conversation with the collector associate, I asked if I could receive a settlement agreement letter before actually making the payment, and she informed me that they no longer did that, only a receipt showing that I paid. By that time, I was getting frustrated, due to the condescending tone in her voice, and I told her I needed to consult with a professional concerning matter before proceeding. So nothing ever got to Hargray as far as a settlement amount, as of yet.
Let me know how it goes.
Will do!!! Thank you!!!
Trying to settle a debt with Chase and they initially offered me 60% of what I owed then eventually agreed to 40%. They said they will not drop it any lower until after charge off. I settled a Bank of America card for 18% before charge off. I am wondering if I should settle now at 40% or if I should wait until charge off and try to get lower. How bad is it for the card to charge off?
Thank you for all your time and help
Charge off is not a big deal. It is usually a far better idea to settle when you can save the most money.
That said, you are dealing with Chase. I would wait and settle with the first collection agency they place it with, and for a little better savings than you have been offered so far. If you were dealing with another creditor, the decision may not be so easy. Charge off is when some banks also will choose to send your account to collection law firm, and that can make things more expensive than the 40%.
Hi Michael
So I waited until charge off and was put with Nationwide Credit union. Before charge off Chase was willing to settle for $1700 and now they say they are only willing to settle for $2100. I assumed when it charged off I’d be offered a better settlement, not worse. Wondering your advice
Thank you very much
You will, you may just be going about it wrong, or too early. Fill in the talk to Michael form in the right column. When I get that I will email you to set up a time to go over some things on the phone.
I received a debt settlement letter, but it seems kind of weak. It basically states: When your scheduled payment has been received and has cleared the bank our firm will file an acknowledgement of satisfaction of judgement. Nothing about paid in full, etc. Is this enough or can they hit me up for more money after I pay the judgement amount. We already negotiated a settlement amount but I am scared to send them the money.
With judgments you are really only expecting them to file a satisfaction. They cannot collect more after that.
My total bill was for 16500 and I settled for 13,200. This is with the CItibank debt attorneys. A firm that has had numerous complaints. My new question is if 13,200 settles with Citibank how do the debt attorneys make their money or they going to ask for more money after I pay the settlement amount of 13,,200 ? The settlement letter states that I have settled with Citibank but not the attorneys /
Your settlement is with the plaintiff, and not the attorneys per say. The collection law firm simply works for the plaintiff. Settlement in your case covers all the players.
How the law firm gets paid by Citibank may vary, and is not important to settling.
Thank you SO much for all your Q & A videos. I believe knowledge is key. You are giving us so much quality and useful information. You are really helping alot of people through a very difficult situation. God Bless You Michael!!
My husband and I combined have a total credit card debt of 39,000. I am in the process of enrolling with NDR. They have determined our payment to be 550.00 a month over 4 years. My problem is all of our debt has already reached collection status and I have 3 judgments against me. 2 are through Portfolio recovery associates (one was just paid 2900.00) by attaching to my MIL’s bank account that she has my name on as a convenience account (she has taken me off, so I am safe there) I just got a notification in the mail yesterday of a judgment lien against ‘current or future interest in real property’. Lots of questions here. Most importantly…HELP with the judgment lien?? What do I do? This is a mortgage, I am in the state of Michigan. Should the homestead exemption protect me from anything bad happening? Will portfolio settle? Can NDR do anything to help with this situation. And 4 years seems like a LONG time, won’t it just be a matter of time before they all take out judgments? I can’t pay more than 550.00 a month to try and settle. Debt settlement companies really scare me as potential scams, but NDR seems promising ?? I’m just at a loss….HELP!!
Post the creditors and balances. Indicate which are judgments, and if a debt collector has the account. I can offer some strategy to you after that.
4 years is too long.
There are a ton of them, probably 20? All averaging between 1000-2500.00 each. A few may be under 1000.00. 1/2 are in collection the other 1/2 have been charged off, awaiting for a collection agency to snatch them up I’m afraid. NDR told me the total debt, including the ones in collection was 39,000. Is there a better way to get you the info you ask for? I’m not exactly sure who has what. One judgement is for around 1800.00. One that was just paid was for 2900.00 (that one was with portfolio recovery) the 3rd that I just received notice of a property lien is for 4791.00, that one is also through portfolio.
Thanks!
I suppose you can pull your credit reports and get a list of all of them if you do not have them listed out already. The specifics matter if you want detailed feedback.
I have settled my finance with Motonovo for my car today in full as I have sold it. I paid on line the settlement figures that they advised. Now say they can not give me a settlement clearance letter as there will br further charges as the account has been given to a debt management company as I have missed the last 2 payments.
Can they do, this as I have paid the car loan in full the figure they gave me on line today. I may loose the sale of the car now. What can I do and is this allowed?
I am not familiar enough with how things work in the UK to assist you.
Would I be able to ask the collection agency to put “paid in full” on my credit report. I don’t want a settlement to reflect me poorly. For some odd reason, My defaulted student loan doesn’t come up anywhere on my credit report. I even have a judgement that garnishes my tax return. Once I pay this, I feel as though it will come up on my credit report and will impact me negatively.
How long ago did you last pay on the loan, or did it go into default? It may not be on your credit reports because it is too old to be kept on them. And if you were to pay anything today, it does not get to go back on your reports.
When debts are more than 7 months unpaid you really don’t get a boost from paying the full balance. You could not pay twice what you owe and have it reflect as anything other than a paid collection. That is just the same as paying less than what you owe. That is one of the reasons I am partial to settling debts for less the longer they go unpaid.
Hi Michael
Do you recommend making the payments for settlements in person at the bank? Or how do you recommend making the payments?
Thank you!!!!!!
Check out this video from this week about how to pay your settlement agreements.
Hi Michael, thank you for responding to my e-mail concern. I’m currently trying to get an installment letter of agreement from two debt collectors. They both have refused to send a letter of agreement. The collectors are National Credit (AC?),Mitchell L. Morgan c/o Towson Crossing Apartments and Verizon. Both have said “since they are a collection agency they cannot send a letter of installment.
NCAC is double charging for this account. Spoke to Allen Jackson, who stated if I send one payment of $1497.23 debt would be settled. This collection agency is charging me $1496.77 for the debt. Verizon debt is $233.00.
I am not certain I understand what you have going on clearly. Call in for a consult at 800-939-8357 ext 2, and I can get the details.
I am trying to settle a debt with a Bank of America, they gave me an amount I want to accept but they refuse to give it to me in writing until after agreed to on my part. Looking for some assistance navigating this
I tend to get the settlement agreement set up in their system with enough time before payment for me to get the agreement letter from BofA. A couple weeks should do it.
So do you think it would be okay to accept the agreement over the phone and await the letter before making my first payment? Or should I try to keep pushing them for something in writing before agreeing to the settlement ?
Thank you
They say I need to make the payment before the end of the month or it will go to collections at that time. Just worried about agreeing to a settlement verbally, and making the payment and having them change the amount due after to settle in full
You have enough time to set up the payment at the end of the month and get the letter before the payment pull date.
You can also record the call to set your mind at ease. Let them know you are recording and why.
Great thank you! And I have one more account at Chase that is going to charge off at the end of the month. I called and they are really not open to a good settlement at this time. Is there anything I can do to get them to consider a reasonable settlement before the charge off date?
Thank you
I have been encourage Chase settlements with debt collectors after charge off for a while now.
I’m sorry I’m not quite sure what that means. Should I ignore the charge off date or try to settle before ? Or will Chase not settle until after charge off
I have been trying for several weeks now to get two settlement letters. one from version and one from a previous rental collections dept. We had talked about an amount for past due debit, but they both refuse to send a settlement letter but want payments. They stated they send paid in full letters. I need these letter to refinance my vehicle.
Are you offering to settle the debts for a single lump sum or setting up a payment arrangement for the full balance? Who are the debt collection agencies or companies you are dealing with?
If a settlement letter for one lump sum payment does not have a deadline ( ie; offer good thru______) and payment is made 2 weeks later from receipt of letter, does the collection company still have to honor the letter because there was no specified deadline? I did this and the creditor said that the offer was only good for 72hrs. No where in the letter did it state this. Also, the letter was sent by email.
Who is the debt collection agency you are dealing with? What is the original debt about?
The offer was a deed in lieu of foreclosure from a collection agency representing WestGate timeshares. The letter stated the agreement terms (amount $850- will be satisfied in full with no further obligation, etc), but there was no mention of a deadline- if paid by, or offer good until….
When I paid two weeks later, The collector told me that the payment will be applied to the balance and would not satisfy the DIF because the offer was only good for 72hrs. No where was this stated on the agreement. I have not paid anything else and I have not heard from them for 7 months now. This debt was never on my credit to begin with. I figured since I had the agreement in writing and executed my part within a reasonable time, I would not be responsible for anything more, regardless of what the creditor says. By not including a deadline, was that an oversight on the CA’s part or can this bite me later? Thanks for your input.
It could show up later. Has anyone tried to collect again after that?
Be sure and keep a copy of the letter, and your bank statement showing you paid, with your important documents.
No one has tried. Still not on the credit. I figured maybe he missed out on the commission and was just giving me a hard time. I will be sure to keep copies of payment and letter. Thanks for the article!
Post an update with anything new, like it showing as unpaid on your credit, or additional collection efforts. I can help you from there.
Hi Michael,
I have 2 open collections accounts. One from an old apartment complex and one from Centurylink. I tried giving them a call a couple months ago and could not come to a settlement with either debt collector. I haven’t heard from them for a bit, so it was suggested by a financial advisor to send them a pay-for-delete letter with delivery confirmation and a cutoff for responding to the letter. The financial advisor told me that debt collectors usually respond well to pay-for-delete letters. Is this true?
No, it is not true. Pay for delete is far from common. You have shot with doing that with Centurylink, but little to none with the property management company, or the debt collector they are using.
You can try of course, but I would look to have a dialogue on the phone and have that followed up with something in writing. The smaller and more local the collection outfit, your odds may increase.
At the end of the day, a paid collection is not all that bad for your credit. You can still accomplish most credit and finance goals with those debts showing resolved on your credit. In other words, getting them deleted is not something to necessarily get hung up on.
I found out that I have an outstanding medical bill from 2011. In at the end of last year the debt collector contacted me saying I owed a certain amount. The amount seed high. I asked to have the documentation regarding the outstanding account mailed to me. I also agreed to have a small amount of $25 taken out of my bank automatically every month. I also asked the debt collector to please send me something acknowledging this payment arrangement. He said that he couldnt and instead just sent me their bill. Fast forward one or two months later. I get a call from supposedly the same debt collection agency saying i owed money and they wanted my cc information. I didnt understand, I had already made a payme t arrangement. Nothing had changed on my end. Apparently the man I dealt with had quit or been fired and he was the only one with my payment information. All of it sounded a little weird. So again I asked him to please send me the information on the medical bills so that I could verify his request. I never heard back from him. Today I received a certified letter. I havent gone to pick it up but I cant help but be worried. Its the only thing I have outstanding and I cant even get any information on it. What do I do?
Pick up the certified letter and post an update. We can make progress from there.
Hi Michael,
I am currently being threatened with wage garnishment on a personal loan I got when I was 18. I am now 27 and owe $5536, I am going to get in contact with them on if I can settle for one lump sum before wage garnishment has to take effect (have a court date Aug 3rd on the matter) your article very much helped me in what I need to get from them in order to protect myself down the line. It does not seem like my debt was sold because the letter I received still noted PCU as the plaintiff and then noted their lawyers name who are in contact with me.
Its all very last minute and in a time crunch so just wondering a few things
1. I am just looking for all you stated in a letter from them once we figure it out?
2. Is it harder to settle personal loans once they get to this point?
You are looking for the bullet items I point out in my article above.
It is often more difficult to negotiate the best savings when you have already been sued. But it can also be more difficult when you are dealing with a small local or regional credit union too.
Thanks for replying, we ended up settling for a few thousand less than I owed. I paid them with a certified check and kept a copy of it to cover myself as well. They gave me a letter stating it has been ‘settled in full’ and the file with their office has been closed. They also gave me a dismissal form as well for upcoming court case, I am still going to call the court to be sure its dismissed but it appears that this went much smoother than I anticipated.
Nicely done MR! And I would follow through on all court matters like you suggested.
Definitely will follow up, don’t want to wake up to any surprises down the line. Thank you again for all your advice/help!
I agreed to pay a certain amount ari collected in Illinois. They will not send me paperwork. They take 20.00 out weekly. How can i stop it?
You should be able to contact your bank and stop payments going out.
What is the nature of the debt being collected? How much is the total owed?
Hello Mike, just wanted to get your two cents worth on a debt I am trying to settle with Natiowide Credit. I am new at this so thanks in advance for your patience. The letter from Nationwide states that they are “offering me an opportunity to settle this account in full for $2015.61. (The original balance was $9,598). We have been negotiating back and forth for a few months. The original creditor (Chase) is listed on the letter. Does this sound good and what do you think about the settlement total? Thanks.
It is a good deal to take advantage of if you can pay it by the time specified on the letter.
Nationwide Credit uses settlement letter templates that normally meet the requirements I outline in the above article. Make sure of that and then follow through. Congratulations!
Thanks, I appreciate it
Just a update on our situation with Natiowide Credit. They have offered in writing a settlement consisting of 12 monthly payments of $175, which is around $2100. Just wanted to get your thoughts. Our budget would work better paying it out in installments. Do you prefer the one-time lump sum payment? Thanks.
John
As a general rule, it is better to settle with a lump sum single payment than extend it over any period, but only if you can raise the money.
I have seen Murphy’s Law apply all too often when making multiple payments on a settlement.
If the only way to take a deal is to extend the payments, or you strategically need to in order to settle multiple accounts at the same time (always a good idea to reduce risk and maximize savings), payments work. Just be sure you are on time all the time, or early with payments.
Does extending payments increase the chances of a lawsuit?
Not if you have a written agreement.
Ok. One more thing, do I need to do anything else before I send the first payment in or just send a money order? I appreciate your patience as this is all new to me.
If everything is in order, I would make my payments. I would not use money orders unless they are issued by my bank drawn from my bank account. Third party money orders are harder to track and get proof they deposited them.
Quick update, I made my first payment and now the original creditor is calling me and the collection agency no longer has my account on record? Does this make any sense? Thanks.
Not really. So you are saying Chase is not calling you after you made the deal and paid your first payment on time to Nationwide? You have proof of your payment being pulled/cleared, or having arrived at the bank on time?
I thought that once the original creditor (Chase, in this case) sold the debt to the collection agency (Nationwide) then they were out of it? But when I made my first payment, Chase started calling me about the debt and now my account is no longer with Nationwide. I can’t figure it out. I guess I will go back to the drawing board and start re-negotiating with Chase. Sound good?
If you had an agreement I would call Chase and make sure they stick to it. If they will not honor a prior agreement that Nationwide set up with you, and you are not in default of that, let me know.
Nationwide does not buy debt. They are a contingency debt collector.
Chase stopped selling debt in 2013. That may not last much longer, but your debt has probably not been sold.
Hi Michael,
Thanks to all your advice from the website I have finally mustered the courage to resolve my Amex debt that was in default 90 days and sent to Zwicker & Associates for collection. I negotiated the settlement and they faxed me the letter. I agreed to one time lump sum payment on July 29,2016; and authorized them to take money out from my checking account (not used for anything else but for this). I was wondering if you could review my letter? They faxed it over and they said they will mail hard copy. My concern is that all other “samples” from Zwicker & Associates had name of the account specialist included, mine doesn’t. Is this a concern? They also told me they would send me relief letter from the law firm after the payment, although the person I talked to first said it would come from Amex, then corrected himself. It seemed too easy, the whole process. I got the letter, but I am just worried if I am missing anything here? I called Amex and automated message confirmed that Zwicker & Associates has my account and the phone number matched.Thank you in advance for your time.
The account specialist not being named would be no concern for me. And it really can be that easy to negotiate a settlement and get it documented. There are only a few large collection outfits that have not caught up with the times. Places like Portfolio Recovery Associates have to be dragged into the 21st century kicking and screaming, but most get it.
You can call in for a consult if you like at 800-939-8357, ext 2 rings my phone.