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 Michael ,
Having found your site gave us new hope, I have a question, I have bills on my credit report from different collection agency and we really want to settle it, pay off all our bad debts starting with mine, so we can start building up our credit rating and score. Started calling them last week we have ready funds to pay off al my bad debt but I asked them to send me a letter or a receipt first stating that I have paid the amount that we have agreed( settlement letter) before I send the payment in cashiers check or Money order for my protection and record. But they refused they want my checking acc#. Or my debit/credit card then they will mail the settlement letter after payment is done. My husband had a bad experienced 3 years ago when he paid a collection agency by phone with a personal check, it was not reflected to his debt us paid instead it was sold to another agency. We don’t want to make the same mistake again. I don’t owe them much ($3000 more or less) We just want to clear my debt first then my husband next.
What would you recommend us to do?
Perliza – I can help you. Let’s move our comment exchange to a more relevant page that is specific to dealing with debt collectors.
Go to this page: https://consumerrecoverynetwork.com/question/settling-charged-off-credit-card-debts-with-collection-company/
In the comments on that page, post the name of each debt collection agency you are dealing with and the balances owed. I will have feedback for each account.
I would get a copy of my credit from the 3 credit bureaus and would give you the names of each collection agency. Hope that would be a start for us to move forward.
Thanks a lot.
I just settled with the second lien holder of our foreclosed property last week. I received the settlement agreement (SA) and already paid the settled amount. My challenge is that the collection agency is giving me a hard time on how it will be recorded with the service bureaus (SB). In the SA, it states that it will be recored as “settled in full.” However, they are stating via email that it’s going to be reported as “settled for less.” My questions are two folds.
1. Is wording recorded to the SB better for our credit if “settled in full” is used compared to “settled for less?”
2. What is my recourse if they decide to not perform what is stated in the SA?
Thank you.
Chris – I do have some feedback to offer, but before I do, I want to get clarity on your use of the term Service Bureau. Are you referring to credit reporting agencies when using that term, or the loan servicer?
Hi Michael,
Thank you so much for sharing so much invaluable advice.
I am currently being sued by Portfolio Recovery Associates for the amount of $21,000. I called them to negotiate a settlement. After a couple phone conversations we agreed at a settlement of $10,800. I asked them to send me a settlement letter first, but they told me the will not send a letter until after the have received my electronic banking information. After reading through a lot of your articles and comments, I know I should not make any payments until I get something in writing. Please advise me on what I should do at this point. I have an separate account set up with the funds ready to pay them, but I don’t want to until I receive the letter. I have to respond to the summons by Oct. 20th.
I am also in negotiations with Wells Fargo and have come to a verbal settlement agreement and they also won’t send me a settlement letter until they have payment information.
FYI – I have recorded all my calls.
Please help!
Amma – You are in good shape with the recordings. Starting a couple years ago, it became a bit more common for original creditors like Wells Fargo and Chase to want to get the payment information and dates set up in their system before releasing the settlement letter or written agreement. This is why I often recommend setting the first or only payment toward the settlement to a date a week or so from when you negotiate the arrangement. This allows time to get the letter via mail, or faxed to you (which can take a couple days for internal systems). The fact that you are using a different account to fund these is another layer of protection, because you simply would not place the amount you are settling for in the account if you do not have documentation in hand prior to the payment date. And this is especially important with the Portfolio Recovery Associates settlement. PRA got weird with their settlement letter policies in the beginning of 2011, and they still can be. The fact that you are settling a lawsuit with PRA means you are likely dealing with a deb collection attorney, and perhaps not with PRA directly. Is that the case? If so, your recordings are even more important. While I do have a measure of trust in PRA doing things right, or correcting an error in processing a settlement if one were to occur, I have little faith in most debt collection law firms.
I believe I’ve been dealing with PRA directly. Every time I call I get a PRA rep. They do remind me from time to time that they have already filed a lawsuit. So if I have just the amount needed to fund the settlement in the account I give them and set up a withdrawal date for a couple weeks out, I should be okay?
You have the call recordings, and would be setting up the payment for a date several days out to allow for the agreement to be faxed or mailed. If the agreement does not show up within 48 hours of the payment pull date, you could call and let them know that you set up the payment arrangement with the understanding that a letter would be forthcoming, but you have not received it. This means you will not be able to fund the settlement if it is not faxed over to you right away.
Because you are being sued by them, it is always a good idea to talk with your own attorney about this type of thing. And one with debt collection defense experience would be best. I can help you locate one if you need. That said, you do want any documentation to reference the fact that they will drop any suit. If they balk at this for any reason, post an update here and be precise with what was said.
Portfolio Recovery is as hyper aware of complaints and working those out quicker and more fairly than in years past due to recent regulatory realities. If anything goes south, please post an update and I will help you from there – no charge.
So I finally did receive a letter from PRA before I had to give them my electronic payment information. My concern is that it does not address anything about them dropping the lawsuit.
Here is what the letter states:
“Your account was purchased on 12/18/2012 from FIA card Services, N.A. This letter confirms your arrangement made on 9/23/2013 to make the following payment(s) to settle this account.
Payment in the amount of $10,800 is due by 10/25/2013.
Should you miss any of the payments described herein, this payment plan may become null and void.
If you complete this payment plan and our company is reporting our company’s trade line for this account to the three major credit reporting agencies, our company will report this account as settled.
If you have any questions, please call our office toll free (866) 428-8102. Our operations are 8am-9pm Mon, Tue, Thu, and Friday.
Sincerely,
We are not obligated to renew this offer.”
Should I pay even though is doesn’t say anything about dropping the lawsuit? I have to respond to the summons by Oct. 20th.
Amma – The settlement letter and proof of payment would protect you from any additional collection action. And I would pay it before the summons response deadline. You can and should call and confirm that they will file a motion to dismiss the suit, but this settlement implies same. You could file a motion of your own after taking advantage of the settlement offer if they failed to.
In the past I would have advised some extra caution (and still will with certain debt collectors). Today we have the CFPB paying very close attention to collection companies like Portfolio Recovery Associates. PRA probably has a staff member assigned to the CFPB complaint portal. Any complaint you were to file with the CFPB would be escalated to what I would call a smart set of eyeballs at Portfolio Recovery.
If you do run into trouble please post a comment here and we can go from there.
You do, of course, have the option of requesting a new settlement agreement from PRA that includes reference to the dismissal they will file.
Thanks Michael, I’ll go ahead an try to open a separate account for this. The debt buyer is Cavalry Portfolio Services, LLC and the debt Collector is Vision Financial. Do you know them?
I do, and I would suggest going with the separate account for your payment on the settlement. If you would like me to review the settlement letter with you, I can do that. No charge. Just email me if you want to connect on that after you get it. Just reply to the same email you get these comment notifications from.
Anna – I reviewed the settlement letter from Vision Financial Collection Services and Cavalry SPV. It’s a solid and standard letter that I would be comfortable with. With a week to pay, you can set up the additional account at your local bank branch tomorrow and call in your payment in plenty of time.
Great work!
Thank you very much for your help!
All the best,
Anna
Hi Michael,
I just made a settlement for my BofA credit card debt with the debt collector about 40 min ago, I owed $11.400 and they accepted a lump sum of $2000. I asked them to send me a letter with all the agreements also stating that the debt is paid in full and that they will not resell the debt. This debt collector is collecting for the owner of the debt which is no longer BofA. They agreed on sending the letter and will send it via email, will that be a valid document? Also, they are requesting my bank account number to collect the lump sum on the date we will agree on. I told them that I don’t feel comfortable giving them my acc # and if instead I could send them the money in a different way liie a money order or cashier check. They said they will only accept the acc#. I definitely don’t want to give them any of my bank information. I thought that perhaps I could buy a prepaid card but not sure if they will accept it. I’m still waiting for their email, I haven’t received it yet. Please give me your advise. Thanks
Anna – If the emailed settlement letter comes in the form of an attached document on their letterhead, and it meets all of the requirements, that should not pose any problems. Just be sure to print a copy and keep in a safe place. If the agreement comes in the form of an email message (in the body and nothing attached), I personally would not accept that.
As far as paying, it is fairly common to pay over the phone with your checking account info. It is less and less of a concern to do that, and hold tight to sending a certified check. I do recommend you use a separate account for funding settlements. You can set the account up at the same bank you have now. Takes about 20 minutes. If you have the time to do that before the payment date you agreed to, read this report: https://consumerrecoverynetwork.com/paying-your-credit-card-debt-settlements/
If I knew the debt buyer, and the debt collector names, I would be able to offer more about either by way of experience.
Hi Michael,
I recieced a settlement letter recently but they spelled my city name and entered an incorrect zip code on the settlement letter. Luckily it still arrived at my address but I’m wondering if I should request another letter? All other important requirents are met on the letter. What do you think?
Paul – Does the settlement letter identify you and the debt correctly? I sincerely doubt you would have a problem using the letter to back up the fact that you resolved the debt. You can certainly call in to suggest you are willing to accept the offer, but only if the letter is corrected.
Thanks Michael. They sent the updated letter without hassle and everything else matched up correctly.
Nicely done Paul. And thank you for posting the update.
Michael – Super excited! Thank you again for everything! Ill work on my questions tonight, and post first thing tomorrow!
Michael – Wonderful, I have done most of the leg work cleaning up my credit. There wasnt much to work on as most of our “financial life” was in my husbands name. Anyhow long story short I need to clean up his, that is where the serious work is going to be. I need to get him to a 640 so I have to get about 100 points. The issues I am bringing fourth here today are solely the small things that are hang ups in my name.
I dont have anything recent from either of them, didnt even know I knew either of them money. Pulled my credit to see where I stand in the world, and found out I owed both places. Made a phone call to each asking status, total amount due and original company trying to collect. Both places were untolerable. It was surreal.
I hear its a good idea ( in the clean up process) to dispute everything you can on your report, and then go from there. Do you give advice on the best steps in the clean up process?
Melissa
Melissa – Disputing all negatives on your credit report can lead to additional hurdles that are not necessary. I am not a fan of blanket disputes.
I do offer feedback on credit reporting for the DIY-er. Lets start a page on the topic together. You can use the Ask Michael feature here to start a page.
Fill in as much detail about your credit goals, credit needs, and the negatives on your husbands report in the situation/background section. Pose a condensed set of questions and submit. I will get the alert and respond with feedback and likely additional questions (but tomorrow). We can correspond on that page through the comments and work through to your achieving your goals. Sound good?
Michael, this is such great advice. I have a question for you. I am in basically the same situation as MelissaD. I have a utility bill on my credit report for less than $300 that’s about 3-4 years old. I want to pay off the debt in full, but I can’t get ANYTHING in writing from the debt collectors (Robinson, Reagan, & Young). They told me to send a check for the full amount and they “promise” to send me a receipt/paid in full letter afterwards. But I don’t trust them to do this. My husband and I are trying to get a mortgage loan and this utility bill has been a major obstacle for us.
So my question is, how do I get a payoff letter from them prior to payment? If I can’t get this, is it really safe to send them the payment with nothing in writing?
I am contacting Robinson, Reagan, and Young of my own accord. They have not tried to collect this debt from me in years and seem to have no interest in doing anything to help move this process along.
Harper – If you record the phone call, even let them know that you are, identify the collector, the company, your account number, the payment arrangements being made etc., you can move forward without the letter. But I would rather you get the letter.
If you are paying the bill in full, the loan officer or mortgage broker you are working with may be able to help you with this. Tell him/her about the situation and ask them to send Robinson Reagan and Young a written demand request, then follow up with payment on that once the loan officer receives it.
If you run into any trouble from here, post an update to this comment string and I can help you further.
Thank you very much! I will be sure to discuss this at our next meeting with the loan officer. I will also be sure to record any further phone conversations that may occur between myself and the collector. Thanks again!
Michael, thank you for assuring me others have felt this way. If I proceed and pay both in full and fail to get the letters, there is a next step? Maybe a back up plan? That would really help me feel a lot better. You couldnt be more correct… random you would want to be difficult to work with. Im offering the entire dollar amount, I just want to be able to update my credit report to reflect such! Is there a forum for other questions (dispute letters, credit repair, etc)?! This has been wonderful.
Thanks again!
The next step after paying the debts would be to wait about 30 to 60 days and then check your credit report to see that any reporting has been updated to show the accounts as paid. If you needed something to happen quicker because you are trying to get a home loan or something like that, you could take some steps to expedite that, and would certainly want the payoff/settlement letter for each account.
If the accounts are not update on your credit reports properly after a reasonable time, you would then dispute that information with the agencies reporting and the bureaus. I can help you through that process here on the site. I have not fully published the credit reporting section with all of the guides and material, but those may be up by the time you need the info. Otherwise, I will point you to the most relevant pages if this indeed comes up.
Question: Do you have any recent collection notices from Credit Protection Association or Financial Credit Network? If so, when did you receive the most recent letters?
Hi Michael:
Just found your website today. Read your above advice about settlement letters and agreements. I also read through most of the comments to get a feel for other peoples situations. I unfortunately still feel as though I do not totally understand. So I have two accounts I would like to pay in full. One is with Crd Prt Assoc, and the other is with Financial Credit Network. Step one, I call and state that I will be paying the accounts in full and will need an agreement or settlement letter? Here is where (I believe) I am lost.I will ask the company to send me this letter prior to giving them any money? Does the letter stipulate that once payment is received X will take place?! I plan on calling tomorrow, if not Monday to begin this process, really looking forward to your thoughts. Thank you in advance for all your information.
Melissa – If you are paying in full, the concerns about debt settlement wording in the letter is not an issue. You are not calling to negotiate any balance reduction or payment terms, so just requesting a payoff letter would be fine.
What else you may be looking for in the pay off letter as far as “X” taking place may be something like “Once payment is received, we will update our information with the credit reporting bureaus to show paid in full”, or something similar.
What were these collection accounts originally? How old are the debts?
Michael,
Thank you again for every minute of your time. One of the collections is medical and one is a untility company in California. I moved and didnt provide them with a forwarding address thus causing it to snowball out of control. The medical account is about 2 years old, the utility is say 4 years old. I fear making these large payments and simply getting no letter, I didnt realize it was common to ask for the letter prior to payment. Do I just state I would like the letter and then you can take your money from said account? I was told I will need to contact the bureaus myself with the letter as they do not haggle with this. I just cant express how uneasy I am. I truly dont want to send $1,000 and simply be in the same position. The reps at both companies have already been impossible to tolerate and all I was asking is total amount due. Is it normal to feel like this is a trap? I need those letters.
Melissa
Melissa – It is fairly common to feel as if you are being trapped by debt collectors, even when you are simply trying to pay off the bill. It is a bit counter intuitive that debt collectors will make it difficult to pay them, but many of them to develop a gruffness to their job that spills over to the successful files they work.
If you run into trouble getting the pay off letters post an update here. I can assist you further.
Hi Michael,
I just wanted to update you on today’s events. I did as you said and filed a complaint. This is what I received
: We reviewed your complaint, but the company you complain about is not yet registered in our system. We are actively trying to register the company you identified so we can process your complaint. We will let you know when we are able to forward your complaint to the company.
In the meantime:
– We’ve sent a copy of your complaint to the Federal Trade Commission, where they’ve included it in a database for state and federal law enforcement agencies.
– You may contact your state and local consumer protection offices about the issues raised in your complaint. Call 311 or your local directory assistance to find your local resources.
– You may contact the company about this matter directly.
– You may get help from a private attorney, your local legal services office, or file your own case in court. Certain laws may limit the time period in which you can file. If you need free advice from an attorney, you can contact legal aid organizations for a referral. Visit http://www.lsc.gov to find legal aid in your area.
Please keep in mind that, the CFPB cannot represent individuals in legal matters, and that this letter is not meant to say whether or not your complaint is valid.
I also did a lot of digging yesterday to try to find a number for Prime Source because the number they have listed said the account is locked. Whatever that means. So I went on and found FR Holdings who used to deal with Prime Source. I called and left a message for a very nice gentleman who called me back this morning and said that a settlement was emailed to NDR back in April, but he would call Prime Source for me and have the letter emailed to me this afternoon. Keeping my fingers crossed that I do receive this letter. You have been a huge help to me and I appreciate your time and energy getting back to me. I will keep you updated on the progress of both of these events.
Thank You again,
Eva
Thanks Eva, and please do post updates about your situation.
It is interesting that Prime Source has not registered and assigned someone to monitor the CFPB complaint portal. This year brought the most significant changes to the debt collection industry since 1977, and the CFPB is a huge part of that. I suspect there is more change to come. Why Prime Source would not be at the top of their game right now with registration is, at least to me, a caution for others dealing with them.
Thank You so much Michael!!! I will do exactly as you said , and keep you updated on what transpires.
I really thought I had no hope left at all but to pay it all over again.
Again Thank You sooo much!!
Hi Michael,
We had set up a seperate bank account with our personal bank. So I have access to the account and can see that a $1, 500 payment was made to Prime Source on April 26th. G&W also has this information because when I was talking with them they told me they saw the payment to Prime was processed on April 25th. So they know the money went to a debt collector but was a clerical error when processed. As far as emails go the only email I have from NDR is a spreed sheet from them saying Exxon was settled. Thanks for the words of encouragement and all your help.
I forgot to add that G&W told me without the letter stating that the account was settled there was nothing they could do, except offer me a settlement of $1,200 on the $1,600 that is left on the account.
Okay. I was hoping you would be able to identify dates for when National Debt Resolution had struck the deal with Prime Source Capital.
First, I want to state the obvious (more for later readers of this page than anything else): You absolutely want some form of documentation when settling a debt. Whether you are negotiating settlement agreements on your own, or hire someone else to do that for you. There are one off scenarios where you can record a phone call, or even be meticulous with notes of what was said, when, and by whom. But the best way to insure that you can overcome a mistake like has happened with Prime Source Capital, is to get everything in writing. With that out of the way, here is my first suggestion:
Put together a complete chronology of events surrounding this account, and include everyone involved. Full names of companies, people you talked with at NDR, dates, and who you have talked with at Prime Source and Gordon and Weinberg. Once you have all of your notes put together, I want you to file a complaint with the CFPB here: https://www.consumerfinance.gov/complaint/. Once on that page click on “debt collection” and start filling in all of the fields using your notes as a reference. You are basically filing a complaint about collection continuing after the debt was resolved. Prime Source Capital Management will have some record of what transpired with National Debt Resolution, either an email exchange, letter, or record of a phone call that took place (perhaps even a recording of any phone call). They will also have a record of any past transactions with your debt settlement company, which once reviewed would likely show no pattern of simple payment arrangements, but a consistent pattern of settlements, which would make it fairly safe to assume that is what occurred with you.
Once you file the complaint against both Prime Source, and Gordon and Weinberg, you should be able to check on the status, and can expect some type of correspondence with in a few weeks.
I would encourage you to do this as soon as you can. Please post updates in this comment string with your experience and results.
Hi Michael,
Sorry about that NDR is National Debt Resolutions. They were the the agency we used. The payment was processed through Prime Source Capital Management. The amount that was left after settlement is now with Gordon and Weinburg. When I spoke with G & W the associate informed me that they have the $ 1, 500 on record but it was put in as a payment not a settlement. I’m sorry about all the confusion, I so upset over all this. Thank you for getting back to me.
Eva
Thanks for the additional details Eva. Prime Source Capital is a debt collector. Did National Debt Resolution have you set up with an escrow account through someplace like Global Client Solutions, or NoteWorld (now Meracord)? If so, can you still log into your escrow account on line?
Try not to stress over this. It is unfortunate you do not have the written agreement or settlement letter. It would make resolving this simpler. But you can get through this all the same.
Do you happen to have any email communication saved from National Debt Resolutions about the account? Anything identifying the date they said they had reached the agreement with Prime Source? How about the date of payment remittance for the settlement?
Hi Michael,
Was wondering if you could help me. We settled a whole bunch of debts we had through NDR. We were supposed to be in the clear, but I just recieved a letter from Gordon and Weinberg telling me that my Exxon/Mobil is not settled. The settlement was through another company called Prime Source Capital Management. I called G&W and they have record of a payment being made that was to be the settlement but someone processed it as a payment. I do not have a settlement letter as it was sent to NDR. Whom I contacted a thousand times to get the letter. Now they are out of business and PSCM isn’t returning my phone calls. Is there anything I can do? They see that a payment was made, I have my bank statement. I just wanna cry at this point. Thank You in advance for any advice you may have to offer.
Eva
Eva – Is the NDR you are referring to National Debt Relief? If not, who is NDR? Who was the payment processor for your settlements – someone like global client solutions?
I can help you, but need to know who was involved along the way before offering up what to do next.
Hey Michael if the debt settlement letter I received shows an extra “$” before the settlement amount, is it okay to pay or should I request a new letter?
Example: “…..we have agreed with you to accept $$3200.00 as settlement in full…..”
I just want to make sure there’s no hidden “we gotcha” if an issue ever arises. It’s paying a $6k debt.
Jerry – I would have no concern about the additional dollar sign in the settlement letter.
Thanks Michael.
Another question. I forgot to write “settlement in full” on cashiers check. Is this bad? I did keep copies of the check and of course the settlement letter.
Jerry – The letter outlining the settlement terms etc., and proof of payment being made within the agreed time is all you need. Placing settlement in full in the memo of the check is not necessary.
have u heard of a monarch and associates??? they’ve called a few times threading me with court papers. never once have I heard from them until a few days ago when they called my mom. I’ve googled the name and came up with nothing. after serveal more calls I was afraid and ended up paying settling the debt at a lower price. before hanging up the phone he told me I will get a email with the settlement offer paid in full and the two receipts that needed to be signed and sent back. After hanging up the phone it dawned on me that I never had to that before so now I feel like I was a victim of a scam or was I not. In the letter they are address is in norco California. I’ve already called both my banks and notified them of this, I’m just not 100% sure this company is real or not
Liz – Couple things – You say Monarch and Associates has called a few times and threatened you with court papers. You then say you never heard from them before until a couple of days ago when they called your mom. I want to be sure I am reading your comment correctly. I read it as – in the span of a couple days your mother was called, then you were called and threatened with a law suit, it stressed you to the point that you agreed to a settlement. You are waiting for an email and are supposed to sign two receipts and send those back.
I am glad you cancelled any payments and alerted your bank. I would like to see the email they send with the receipts. If you are up to it, I will review those, and the company, with your help. We can connect on this off line. Just post a follow up reply to this comment string and let me know you are good with connecting via email and on the phone and we can go from there.
Yes I am ok with connecting thru email and phone
Great. Sending you an email now.
I have two questions and I would greatly appreciate your help.
1. Is a settlement offer and settlement agreement the same ?
2. If a collection agency faxed me a settlement offer which met all of the requirements perfectly and then 3 days later said it was sent in error that the actual creditor did not authorize the settlement agreement and as a result they want to rescind the offer-can I continue to meet the payments that are set out in the letter and pay the settlement amount ? I did send a check (after they verbally told me they would send me written notification of their intentions to rescind) they said they would return the check to me. I believe as long as I perform under the terms of the agreement that there is a valid contract in spite of their attempt to rescind their offer.
Geneva – There may be an argument you can make in court for them honoring the previous written settlement offer and agreement. But you would have to file the action which has its costs. You would want an experienced attorney in order to increase your odds of succeeding. In the end, you may not succeed and have spent money in the process.
Can you provide some more details about what took place?
Who is the debt collection agency?
Who are they collecting for?
What was the balance owed, and what was the settlement offer and terms?
If I know the answers to those questions I would be better able to help you.
Thank you for responding,
Northstar for Mercedes Benz balance of $3333.59 settlement for $2,666.88 to be paid in 3 payments of $888.96 on 9/19 -10/19 -11/19. I have sent the first payment all ready check by mail certified.
Initially I contacted them we discussed the account and came to a verbal agreement which is stated above in mid July. The following day I attempted to submit a payment they said they would not go through with the deal so I did not send a payment. In early August I contacted them again with the same terms and this time they faxed me a settlement letter stating the above terms in addition to all other information that is necessary for a settlement agreement (account number etc). That was on August 5th on August 9th they telephoned me and stated they would rescind the settlement agreement because Mercedes did not authorize it. I told them we have a written agreement all ready in place and I posted a payment (by mail that same day) they responded by telling me they would send the check back. Yesterday the 11th I received by mail a letter from Northstar stating that the settlement agreement was sent out in error and that the offer is now null and void. In addition they stated if I do not respond to the letter within 30 days they will return the account to my creditor (Mercedes Benz) and their file will be closed and I will have to respond to the creditor.
What are any possible concerns I should have at this point. My intentions are to follow through with the last 2 payments under the settlement agreement and then request the title of the car. Also I am in Florida.
Geneva – I would suggest you speak with a consumer law attorney with a practice that focuses on collection issues before proceeding with any payment, or any other strategy. If you would like for me to help you located on near you, send an email reply to this comment notification and I will send back contact info.
Hi Michael,
AT&T has sent me over to a collection agency and I called them to see if we can work out a settlement as AT&T said they cannot take payments on the account since it is transferred out. A rep (whose name I obtained) said they would settle at xyz amount. I failed to ask if it would remove all negative inquiries, nor did he tell me it was on my credit report already she did indicate it would pay my bill in full. I called the agency again this morning having issues trying to log in and pay (i know bad mistake w/o a written agreement) and another male rep said by settling they will not remove any negative remarks from my account unless they receive the full amount. This didn’t sit right with me. So I said I would think about it. I am trying to draft a letter regarding the settlement terms to send via certified mail. Am I on the right path? I did tell the rep the payment was going to be made today but in light of whats transpired I cannot in good faith make a blind payment without documentation. Any advice/suggestions? I’m afraid they’re going to sell off this debt and again I will have to start up this game again. I called back asking to speak w/the same rep as yesterday but they transfered me to the guy I spoke with this morning. I sense sneaky tactics by this guy.
Michele – Sending letters out that you draft is not usually met with success. You want to get something in writing from them.
I want to be sure I understand where you are at:
Is this for a phone bill?
Who is the agency collecting?
Are you more focused on your credit report, or saving money in the settlement?
Nothing you have shared so far suggests to me any thing sneaky.
Yes it is for a phone bill. I don’t want it ony credit report n I’ve had/am having major medical issues so if I can do both (reduce n remove) it would be great. I called back to get the rep I spoke with to send me something in writing n she was not available nor did she call back. How do I get them to send me something in writing as I’ve read that it’s a fat chance it’ll happen
Michelle – Reduce and remove is not generally an option. With utilities, like a phone bill, there are instances where you can get the company to remove for full payment.
If you go for the settlement rather than removal, getting that documentation is more standard than not. If you are holding out for a letter that states clearly your payment is in return for the credit report entry removal, that is where the fat chance comes in.
I was sued by capital one bank, from my Credit card through Michael Scott out of Dallas, they filed in the county courts and the Judgement is pending. I responded as required, and stated I didn’t owe the debt and demanded verification to the lawyer and to the courts to stop any default judgement. Although the lawyer continues to call, and I have never answered any of their calls, the card is old and, was max’d and paid on for over 10 years, hard times have had me unemployed, previously self employed, so no unemployment wages. They filed within 3 years of my not being able to pay.
I still don’t want a judgement to deal with for personal reasons. I am needing to know how much time will the pending Judgement be good for… or do I need to try to negotiate a settlement…. if so, will attempting to negotiate a settlement over the phone negate my ” I don’t owe the debt ” plea… as I know they record all phone calls in an attempt to collect a debt..
I am cash broke by the way.. and have been for a long time..
Thank you Sir for any pearls of wisdom,
John T.
John – Unless you are in a position to follow through with any negotiated settlement, I would not suggest calling to just feel out your options. How much are you being sued for and how much can you pull together to offer in a settlement?
As far as how long it could take for the case to progress, it varies. Have you gotten anything from them since you filed an answer besides phone calls?