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
Hello,
I contacted the collections agency to request a paid in full or settlement letter. The person said they do not send those out until after the account is paid and that’s the way they do business. $200 is what is owed. Should I just pay it and call back to request the letter? Or are they doing business wrong?
I’m dealing with enhanced recovery corporation in Jacksonville, FL
Thank you
Jonathan – As an alternative, you could call Enhanced Recovery Co back, and let them know you are recording the call (and why), making sure to cover all of the points I mention in the debt settlement report above. Keep the recording in a safe place. If there are any complications after that, post an update and lets go from there.
What was this debt originally for?
From a t mobile account
Michael –
I reached an agreement with a law firm handling the collection of a credit card debt that I owe. We reached an agreement before I was to go to court over the matter. I asked them if they would dismiss the case with prejudice since I was making payments. I owe $4500 on the card, paid a $500 down payment and at this point have made 3 payments of $183. They said that they would not dismiss so that they could protect themselves, but that as long as I made my payments, they would stay the execution of any judgment unless I defaulted on my payments. I was the only one that showed up to court TWICE…I did tell the judge that I owed the debt and had no problem paying what I owed, so judgment was issued to the plaintiff…great, fine, and wonderful. However, I have since received a Journal Entry of Judgment…that according to the court, was issued by the law firm, and then signed off on at the court. This states that they were in court both times ( LIE )…that I was summoned twice and never showed up ( LIE )…even though the judges notes clearly state that I was the only one that appeared…and that a default judgment had been granted with 12% interest. Can I go after THEM for going against our agreement? I have everything in writing!!
Janna – You admitted to the debt in court and consented, or stipulated to judgment. Either what happened next was not explained to you well, or they did take entry of judgment too far (court clerk or plaintiff) if your agreement says final entry of judgment would not occur if all payments were timely. Are you prepared to hire and pay your own attorney to look into the issues? And even if it ends up nothing worthwhile can be done about it?
Hi Michael I was reading some of the similar situations that I am experiencing right now. Almost 6 months 4-5 months ago I enrolled in a settlement program for 3 cards. Amex approx. 14000, citi4,ooo and target 2000. Right now i am schedule for non trial jury on May 29 by AMEX. believing the settlement program will work for me. I am worried that my other credit cards will summon me. 2 weeks ago I dropped the target not to include anymore on the settlement. Do I have the right to drop the citicard to avoid future summons and do I need a lawyer for amex? Can the settlement program I enrolled will negotiate with amex even though I have to go to court. I just want to pay what I owed monthly or settled without going to the court. I need your advice. Thank you.
Del – How much money can you pool together, from whatever sources, to get these settlements done in a hurry? If only able to do one at a time, how much can you pull together to handle the AMEX account?
We are trying to help our son resolve some credit issues with Verizon. He received a debt collection letter from Stephens and Michaels for more than $1K. Our son does not have all the paperwork from the original bill and says that Verizon didn’t credit him with amounts that they owed him. He cancelled the contract with Verizon years ago and paid extra to end the contract. Stephens and Michaels offers a one time settlement of $400. Do we need more proof from them that this is the end of the problem?
Please advise. We have little time to deal with this. The letter is dated March 12, 2014 but wasn’t received until around March 25th, not really sure. We were planning to pay the $400, but not if it doesn’t end the dispute. Just not sure what the best way to handle this.
Thank you in advance for any help you may be able to provide.
Gerri – I would need to see the settlement offer letter. Are all of the elements I cover in the above report found in the settlement offer? Also, is this debt appearing on your sons credit reports in any way (whether by Verizon or a debt collector)?
Hello!
I am a bit confused and could use some help!
I am trying to clean up my credit report, its very poor. I have been paying off debts and been checking my score. I just saw a collections status from LB GRAY LLC, and its from 10/2012. I thought I had paid this off, but there is still a balance there. However, I have NOT received ANY letters to collect this debt, which is part of why I didn’t know there was still a balance. How should I go about fixing this? Id rather not pay it since I thought it was paid and have not been receiving letters.
Sarah – Do you have an agreement that covers the settlement, and proof that you paid? If so, your request for that info to be corrected should go off with out a hitch.
Thank you for such an informative site!
I had a cc debt to Citibank that was apparently sold to Atlantic Credit / John Frye. I requested validationa and recently received a packet they got from the original creditor. I am unsure how to proceed. They requested that I call them, because I told them not to call me., I had an attorney working on thw possibility of bankruptcy, which I have so far been able to avoid.
I want to settle (10~15 percent), but reading the above comments, you indicated that the offer should come from them. Should I send a letter requesting a settlement offer? Call and ask for one? We seem to be at a bit of an impasse. I definitely want to avoid getting sued.
Thank you in advance.
JT – If you want to settle you will have to be more realistic about the amount you need to come up with. 10 to 15 percent settlements are just not common.
I prefer settlement agreements be on the creditor or debt collectors letterhead. Most negotiations and settlement dialogue should be done over the phone, not through the mail, in my experience. If it were me, I would call them.
If you do not mind me asking, if all you want to do is negotiate an affordable settlement, why are you sending a debt validation request and telling debt collectors to cease calling you?
I requested the debt validation letter based on the advice I got from my attorney, and all communication was supposed to go through him, which was why I asked them not to call me. Now that it is evident that I cannot file for bankruptcy (long story), negotiating seems the only way to go.
What is a common amount for a lump sum payment? I was given to understand that the amount was less if it was a lump sum rather than a payment plan?
Thank you for your advice, I clearly have gotten some incorrect information!
Debt validation has its place. But when you want to settle, or otherwise resolve a debt, when you know it is yours, requesting validation can actually be counter productive. There are some who promote sending a debt validation letter every time all the time, but more to deny the debt, or attempt to never pay. I am sure your bankruptcy attorney is not in that camp.
A realistic settlement amount would be 35 to 45%. How long ago was the last payment made to Citibank? And yes, a lump sum offer is typically going to have a better chance of succeeding, and of being lower, than a settlement offer with monthly payment terms.
The last payment to Citi was 12/2012. It was charged off in July 2013 and I received the first notice from Atlantic that they *owned* the debt was in August, I believe. They aren’t working for Citi, they bought it.
I read somewhere that they only hold it for a certain amount of time before selling it again. What kind of timeline am I looking at to be able to work with them before they sell off to someone else?
Some debt buyers rarely, if ever resell debt (PRA and Midland being larger examples of this). I do not know whether Atlantic resells, and if they do, when they look to cycle out of non performing purchases. I would look to gauge the timeline for the account moving by how long Frye has been contacting you. Can you pinpoint the first time you heard from Frye, and was that by phone or mail?
It was by phone, they called my cell and didn’t leave a message, so called someone else (that they weren’t allowed to according to law). That person then called me and told me. A few days later I got a letter from them. That was in August 2013.
Hi Michael, We have 6-8 credit cards which we are to the point of being late. I had 2 surgeries the end of last year and we are drowning in debt. We are currently paying our mortgage and car loan 2-3 weeks late (doesn’t affect our credit, but is accumulating fees). I called a couple of the cc companies last month to see if they would work with us (we haven’t been late yet). I’m finding that they won’t do anything to help; from what I’ve heard, we have to be late. We’ve looked into debt management companies vs trying to settle them ourselves. We don’t want to pay the add’l fees associated with DM companies.
The companies we are dealing with are Capital One, USAA, US Bank, and a few department stores. What can we expect as far as a settlement with the credit card companies. Can we expect that they will offer a settlement or will we have to wait til it goes to a collection agency/debt collector? We really do not want to end up in a lawsuit over any of this. Do you know if the companies we’re dealing with normally work with the customer or would we benefit to go thru a DM company? Thank you for your time!
Kerri – If you are up to it, I highly recommend negotiating and settling the debts yourself. When you save on professional fees, that money helps you to settle your debts with USAA, CapOne, USbank and the others that much faster. The faster you pay off the settlements, the less risk of aggressive collections, the sooner your credit can start to bounce back, the less stress….
I would prepare to settle CapOne at around 50% (maybe with them direct before charge off).
USAA I typically estimate at 40% settlements, but the numbers have come in more favorable than that.
US bank has tightened up a bit. My target here would be 40%, but would start lower and see if your file is one that would do better.
You would need to post your department store cards to get some feedback.
Those estimates are when settling direct with the lender, and before charge off. Once an account gets dropped into a collection bucket (see this post) your settlement percentages, and the best way to time your efforts, can all change.
Those banks you listed would all willingly work with you. I have settled debts for customers with each of those banks, and I would not say they have a preference per say, but you can get as good a deal as I can, or probably any other debt management company, so take that route first. Hire a pro if you hit a road block, or if you are not confident of your ability to negotiate.
Just curious, what are the totals of all of these credit card debts, including the department store cards?
The total is around $14,000. When does charge off happen? Is it 90 days from date of last payment or from date you missed the payment? At what point do we start talking to the cc companies? Do we initiate it or wait for them to contact us? Will they make offer for settlement or do we have to flat out ask for it?
Charge off on unsecured accounts like this can happen anywhere between 1 and 180 days of non payment. There are reasons lenders wait as long as accounting rules and OCC guidance allow. Check out this article for more on charge off: https://consumerrecoverynetwork.com/charge-off-and-credit-card-debt-what-it-means-to-you/
Read through the first stage (pre charge off) portion of the debt relief guide to better understand when and how often to talk with your creditors leading up to the best time to settle, which is at about 5 months late for most accounts: https://consumerrecoverynetwork.com/credit-card-debt-settlement-program/
It is a good idea to get a grip on the subject matter I cover in the debt relief critical reports: https://consumerrecoverynetwork.com/debt-relief-program-reports/
Is it legal for a creditor to refuse to send you a copy of your last settlement letter ?
Mario – Can you be more specific about what you have going on here? Is this something where you negotiated a deal, made the payment(s) accordingly, and are not getting the documentation of all of this that was promised? Are you asking a creditor to send you a prior settlement offer they mailed to you that was never acted on? Something else.
It was a previous offer that I did not act on.
Mario – You should check with an attorney in your state, but I am doubtful that there is anything illegal about the creditor not resending you a settlement offer.
If the offer was something you could not take advantage off then, but are better able to today, and they will not make that same offer, lets talk about that. What percentage of the balance are you able to offer as a settlement? How long has it been since you last made a payment? Are you dealing with the credit originator, or a debt collector at this time?
Thanks Michael, Just settled with Mapother for 1500, well its something. But only thanks to your site. They did not want to send a settle letter until I mentioned this website and they quickly changed their tune. THANKS AGAIN FOR YOUR GREAT SITE ITS AMAZING WHAT A LITTLE KNOWLEDGE WILL DO!
Hi Michael, I have a judg.ement lien on my property in Kentucky from Capital One/Mapother and Mapother for $2000.00. I am selling the house and just received an offer on it and accepted, with a closing on 4-4-2014. I am going to see if they will settle for less. Once an agreement is reached, how long does it take for a satisfaction of judgment to clear at the court house? Can I go to the attorney and settle with funds at their office. And get a satidfaction letter from them if they agree. ? Can I take that to the courthouse and get the lien removed? Or should I just wait until closing and pay it off with proceeds? Will the pay off clear in time not to stop the closing? Suggestions? Thanks
Pete – I have had customers be able to walk in and fund a settlement offer with the local attorney. It really only expedites the mail lag time, and would not expedite anything if payment was made over the phone. At least… not in your situation (as long as you have documentation in hand prior to payment).
The part that is going to take the most time is updating the court record. I prefer that the plaintiff do it, but you can file with the court too. There is also the documentation and proof of payment you have that you can give to the title company.
Settling with Mapother and Mapother is worth a shot. At the end of the day, like you said, title will send a demand request and pay the whole thing off out of escrow. Just be sure they do not send that demand request prior to your negotiation efforts. Settlements for less in this scenario do not happen when the other side can see all of your cards.
I am trying to settle a account with portfolio recovery associates the will only send me a settlement letter through email and then after I make the payment send the letter through the mail what should I do.
David – Email is okay in some instances, especially when the Portfolio Recovery settlement agreement is an attachment to the email (so just like a letter they may mail). Post a comment with the from address, and compare the email agreement to the content in the above report, and lets go from there.
Hi Michael,
I had an approval for a medical procedure and the insurance co is now denying payment to the hospital and anesthesiologist (paid the surgeon though). I am continuing to try to appeal the decision with the insurance company. Unfortunately, the anesthesiologist sent the bill to a collector. The bill was originally $2224 (I know this is what they charge the insurance co and not the patient if they have no insurance). I feel pressured to pay and do not believe insurance will resolve this prior to the 60 days before the collection agency reports to the credit agency. I have gotten the collection agency down to $1668. They want me to pay the bill that day by 6:00 p.m. I didn’t do it – I need more time to figure this out. I asked for a settlement letter and they said they do not provide settlement letters and that their recorded calls are proof of the agreed amount and debt being paid. Everything I read makes me uncomfortable with the fact that they won’t provide a letter. The agency is Nationwide Recovery Service.
I have tried to work with the anesthesiologist’s office to get an adjusted bill for patients that pay out of pocket but they say it’s out of their hands, I have to work with the collection agency.
Any advise you have to offer is surely appreciated.
Megan – If you do end up settling with Nationwide Recovery you can record the call with them. Let them know you are recording and why. Hit all the highlights covered in the report above, get any questions answered, and clarity you need. Keep a copy of the recording stored in several places (on hard drive, and a thumb drive, burn a disc). And also have a record of the payment transaction from your bank account.
1668.00 may be as good as it gets.
Michael – I appreciate your response. It is so nice that you are doing this for people. Thank you so much!
Hello Mike,
I received a call from a representative at Walter Riley and Associates regarding a debt from 2001. The creditor then was 1st Premier Bank for a credit card. The settlement amount is $335.37. The account was sent to collection in 2001. This account is no longer on my credit report. The representative informed me that I must pay off the account at the settlement amount of $335.37 or I would be sued and the total amount at that time would be roughly $5000.00. My concern is that I am unable to locate Walter Riley and associates through any search engines. I have called the 855 number given to me and all the recording says is “you have contacted legal services.” Any attorney’s office that I have contacted over the years always says there name on their message. I did make payment arrangement with them over the phone which begins a month later but have yet to receive any documentation from them via mail, fax or e-mail. Is there a statue of limitation in California for such accounts?Am I still liable for this amount from 1st premier bank dating back to 2001?
Thank you for your time,
Frances
Frances – I do not like what you described having happened. Credit card statute of limitations (for a legitimate collection lawsuit to be filed) in California is 4 years. Legitimate debt collectors know that. Having a collector threaten to sue on a 13 year old debt means they could be a flat out scam, or are willing to violate consumer protection laws. Either way, not an outfit I want my money going to. If it were me, I would:
Call my bank, explain what happened, ask for their advice about stopping payment, or how to prevent anything from processing. You may not like this, but your bank may advise you to close your account and open a new one.
Call a consumer law attorney about suing this outfit for collection law violations if they think that is a good idea. Many attorneys that specialize in this area of law (FDCPA violations), take cases on a contingency, so you are not charged a retainer. I can email you contact info if you like.
File a complaint with the CFPB.
I would approach all of this in that order.
As far as being liable… debts do not really go away. Unpaid bills do fall off your credit report after so much time, and lawsuits to collect become time barred. But the debt is there still. What you choose to do with the debt after those lines are crossed is more of a personal decision, at least that is the way I look at it.
Hi Mike,
Thank you for replying to my post. Thank you for clarifying my questions. I gave the representative a prepaid card number with a zero balance due to this not sounding legit. I would really appreciate any info you can share with me to resolve this issue.
Thanks again,
Frances
Frances – Contact an attorney in California with FDCPA experience. I will send you contact info to one you can talk to about this – no cost for the consult. That is my best suggestion for what to do next about this.
Also, do not allow yourself to be pressured in to giving bank, debit, or credit account information out to a debt collector over the phone.
Hello Michael,
I have a question concerning an order of judgement and information subpoena. I have received paper work in a name similar to mine but not my correct name stating a judgement has been filed against me and I need to file out then return the attached subpoena to the Law Office of Kevin Z. Shine, PLLC on behalf of CACH LLC/GE Money Bank. I recognize the original creditor and account/credit card number but they have a different first name listed. The amount last due to GE Money Bank in my actual name was $2,700 and this judgement is for $2,900 with 9% interest until paid. I have never spoke to the Law Office regarding the account but have collected $3,000 and to pay the judgement because the original debt is mine. My issues are: Do I contact them to have the information corrected in my actual name and then pay? Do I contact the court the judgement is file through to have information updated/change? If I obtain a settlement/paid in full letter and pay the judgement in this other name will it legally settle the actual date in my actual name? I just want to clean up old debts while having any legal document needed if something should come up down the road.
Thank you for your time,
Marie
Marie – You have an interesting situation here. And because you have the money in hand to pay this old debt off, I would expect the attorney that sued you with the wrong name may be your advocate in this. It is the entire court record that shows the wrong name was used through out right? Not just this last document you received? If so, you could call them and let them know of the issues and that you can pay your old bill, but would prefer the case in the wrong name be vacated, and an agreement drafted that states as much prior to any payment.
You could also talk about this situation with an experienced consumer law attorney, and ask for their help. I would be upfront about the fact that you have the money in hand to pay the bill off, but because you were sued under the wrong name, would like the court case gone. Ask if they can represent you in the effort to settle and vacate for a reasonable price.
If the settlement you have in your hand is all you want to deal with, and are not into getting the underlying misnamed case corrected in anyway, tell the attorney suing you the issue and get the letter corrected to show your name, account etc.
Thank you for your quick response! Yes all letters, summons complaint, and judgement are in the wrong name. I can just call explain my issues and ask they vacate? What should I be asking for in return as proof just a corrected settlement letter? Sorry for all the questions, I want to feel as prepared as possible before I call them. I would love to get everything corrected, paid, and get some sleep. I’m sure I would like to address the name issue if it is noted on my credit report. I have been holding out pulling me reports because I was aware of this old debt and wanted to pay it before checking my credit. I do find it a bit unnerving that a full legal case with default judgement can be processed under the wrong name.
Thanks again!
Marie
Hello. I have enjoyed reading your articles and comments/responses left!
I do need some clarification and help though, if that is all right.
I have some debt.. mostly student loans in the consolidated amount of 13,000 thru myfedloan. I am fine paying the payments for these as I am on income based repayment and qualify for 0$. the next largest debt is a lab fee left over after a student loan direct with the school. its 1500$ thru Indiana university-purdue university of Indianapolis. it is in collections status. I contacted the lender directly since the collection agency was not negotiating well with me. I was able to get a reasonable payment plan. last debt (that I am aware of) is a collection notice I received yesterday for 425$ from imc (state of Indiana which I live in). I am pretty sure its medical bills-just not totally sure. I would like to settle for 25% with collection agency.
First question: with my debt of 1500$ could I still try to negotiate this? or can I not since I have agreed and made payments per payment plan?
second question: with the last debt mentioned, would I be able to settle with my own letter via email for paper trail? I would like deletion as well.
Third question: if you have any further advice or comments about my situation I would love to hear it! Even if there is something you advise about my student loan debt.
thank you for your time and words of advice!
SarahL – It is not all that common to settle medical debts for 25% of the balance. Not impossible, and more possible the longer the debt sat there collecting dust, but higher percentages are something to be prepared for.
The 1500 private debt is better negotiated when payments are not being made. If you can afford to pay, you should consider that. If this one is not on your credit report, and the other ones are rehabbed, and no longer report late, one medical collection is not all that hard to bounce back from credit wise. If you do work toward settling this debt instead, I find having the agreement on their letter head to be better than a letter you create. Also consider that, in all likelihood, your letter will not conform to that institutions policies for such things. You will typicality not get an agreement for deleting the negative from your credit report. It is not impossible, but nearly so. Who is the debt collector?
Hey Michael,
Just off the phone with MRS. I read your page before calling them. I have debt from Verizon for 450.00 and they sent a settlement for 112. I asked for a settlement letter to be sent and they denied one existed with their company. It was stated that my offer is “the letter”. It has everything you listed on it, accept any words of “satisfied” or settled in “full”. The manager got on the phone and insisted they would send a letter 2 weeks after my payment is made. I told that is your word and that is my money. That I would like an agreement that this will be final and won’t be sold to another collector and can be cleared from my credit. She said the letter is approved by a lawyer and they don’t send anything not approved and cannot send any settlement agreement letter. She said if I don’t believe her then I won’t be making this payment and will continue with the original debt. Its due 2-16-14. Should I send it or what can I do?
Thank you,
A
Amy – How does the letter reference the payment? Does it say settled? Getting hung up on the word “full” is not necessary in a lot of instances.
I am not sure why you are asking for a letter stating that the rest of the balance will not be transferred or sold to another debt collector. Where did you read that is something to look for? It isn’t. That part is inferred in the settlement. If you have to deal with a mistake later where something like that does happen, the settlement letter and the proof of timely payment is what you use to deal with that.
Most collection agencies do not do pay for delete, which is what you are looking for when asking for the account to be cleared from your credit. The account should be updated to show a zero balance owed though.
It is true that these letters with larger collection agencies, like MRS Associates, are approved for use by legal counsel. The collector on the phone, nor the supervisor, or the supervisors manager etc., is likely going to be in a position to make adjustments to the language in the agreements they use. If you are holding out for the changes you referenced wanting, you will likely not be settling this with MRS.
Hi Michael,
I’m trying to Settle a debt with Harvest Credit Management. I’m dealing with The Moore Law Group. I do have a judgement againts me because I did not show up to court. They are willing to settle with me. They sent me through the mail a letter of Amended Payment Agreement for a settlement letter. I was wondering if you could take a look at it to see if it’s a good letter. I would hate for something to come back to bite me later. The letter does not state that this will be paid in full… or from how I interpret it. I called them and they said it is a standard letter and that it won’t be paid in full because it’s a settlement for a lesser amount. They also told me to have someone take a look at the letter if I was not comfortable.
Who or what can I do to make sure the letter is good?
Thank you so much.
Cheryl – I am happy to review the letter and share my feedback. You can send me an email with the letter attached, or we can use email to coordinate your faxing or mailing. My email address is the one you receive comment notifications from.
Cheryl – I reviewed the settlement documents you sent to me today. That is a great settlement on a judgment with Harvest Credit.
I see nothing that would concern me if that letter were one I were acting on for myself. You can, and should, run this by your own attorney in order to proceed with absolute confidence.
Good Job!
Michael,
Thank you so much for taking a look at it. I currently do not have legal counsel. Although, it’s always a good idea.
Thanks again,
We don’t have the resources.
Our closing date is Thursday. We heard from the attorney and it appears they filed something in August (hiring the attorney that garnished our checks the first time) to do so again but that attorney withdrew from the case on January 16th. Our attorney also said the attorney in charge of the judgment is revising the agreement (which means they are most likely going to ask for more money). This means we will definitely lose our money on the house and not be able to close.
Michelle – One suggestion, if you have the resources available, would be to pay the judgment balance directly to the court and expedite satisfaction that way.
I have a credit card debt from Wells Fargo ($7000.00 from 2008) that is in collections with ASSET ACCEPTANCE LLC. They sent me a letter to settle in full for $3200. I can not come up with the total amount.. I called and they then said if I paid $1100 before the end of February they would settle the debt for a new total of $5000 as long as I made $100 payments monthly.
Here is my concern. They said they would only put something in writing with a paid in full settlement and nothing in writing when payments have to take place. I asked about my protection with the “agreement” being pretty much verbal. They said their calls are all recorded and that would be my remedy if something other than what we agreed upon should happen.. and said again they would “…only provide something in writing if I settle in full…”!?!?
Jeff – As you can tell from the critical report, and all of the comments, I am a huge fan of getting everything documented. An alternative is to record all of the agreement in a phone conversation yourself. Tell Asset Acceptance you are recording the call right out of the gate, and because they are unwilling to document your settlement. Get all of the details covered in the above report outlined to you verbally. Identify the recovery person on the other end of the phone etc.
Later this year I believe the CFPB will include documentation of payment plans and settlements as a requirement of all debt collectors and debt buyers in new rules for the industry. Right now that is only a state specific requirement (with few requiring). Not that this helps you right now (more for later readers).