What should a settlement agreement with collector look like, when they've agreed to accept monthly payments?

Question

I recently spoke with a bill collector who agreed to waive interest on my charged off account, and accept low monthly payments on the principle amount of the loan only. I received a computer generated letter with the correct settlement amount, but it only says they expect my monthly payment on a specific date next month, but the letter does not expain that will be my first payment, or when my last payment will be due. What should a settlement agreement look like to insure everything is legitimate? Thanks

Answer 1

Before you send them a dime you need to get it straightened out.

For starters, once you have made any payment on this debt, the statute of limitations restarts. Many creditors use this fact to their advantage by getting you to make any type of payment.

Sometimes they use the "good faith" technique. Lets say you owe $2000...they talk you into sending them $10. Now your SOL is restarted and they can sue you for the entire $2000!

Send these guys another letter. Outline EXACTLY what the terms of your offer are. Go to http://www.creditboards.com and search through their sample letters for more help.

Make sure you have the following thing in your proposal:

1) Total amount you intend to pay
2) Monthly payments
3) An understanding that all future interest and late fees will be waved.
4) Demand that this agreements constitutes "payment in full" and that any unpaid amount in the loan will be excused. Without this agreement, they can sell the remaining balance to another credit collection agence, who will come after you again.
5) Demand that no 1099C be issued. Otherwise you will owe additional taxes on any unpaid balance in this debt.
6) Demand that all negative information be removed from your credit history.
7) Demand that upon completion of payment plan, they send you a letter stating the debt has been totally satisfied.

At the bottom of this letter, insert lines to the effect that they sign and return the letter. If they don't, make sure that whatever they send you states they are agreeing to the terms of your letter. DO NOT accept any counter offer from them that does not include ALL of these items.

Answer 2

Listed below is a link which contains sample letters to send to creditors. You want to make sure that your first payment and expected last payment dates are listed, not to mention the important part about the interest being waived.

Answer 3

I actually have not had that ensue, yet I actually have study some books about credit restoration and each of the authors have warned about this (taking you to courtroom once you've agreed to make funds). the recent company has to furnish you information that they have got the authorization to deliver at the same time on the debt and that you owe the debt.

Answer 4

Get more info from your creditor, and yes, I would want more in writing than they have apparently given you.....regarding the terms of settlement.