Settling

Whattodo · 06-24-2008, 01:38 PM

This may seem like a silly question but here goes. I want to settle with a creditor. They mailed me a letter stating they will settle the account for less than the amount due, if I contact them within 40 days - is there anything I should keep in mind when negotiating?

scelestic practitioner · 06-24-2008, 04:42 PM

make sure that they haven't sold/referrred it out for collection, otherwise settling with them may not stop the other party(s) collection efforts. and you should probably get the agreement in writing first before sending payment. Also, pick a number you can live with and suggest that it's the most you can come up with and you had to borrow from a family member, that way they don't think that you have the means to pay more.

I'm sure the others will chime in with more suggestions. Good luck.

Whattodo · 06-24-2008, 05:36 PM

Thanks for the info. Actually it is not the original creditor but a debt collector (LVNV). From what I've read, an agreement should stipulate that the payment recieved is in full, cannot be sold/bought/tranferred by anyone lese etc. I'll also include the amount I afford. Any other suggestions?

Pale Rider · 06-24-2008, 09:32 PM

Use a restrictive endorsement if legal in your state.

Add a liquidated damages clause to the settlement.

Ask for deletion of negative info from CRA in exchange for payment.

Whattodo · 06-25-2008, 03:10 PM

I'm in California. From what I read, the law is contradictory. Any thoughts?

Pale Rider, what is a liquidated damages clause?

Whattodo · 06-25-2008, 03:12 PM

The law regarding restrictive endorsement, that is.

Pale Rider · 06-25-2008, 06:38 PM

I don't have a sample of the exact wording, but an example would be something like this.

In the settlement you both agree that you will pay $x.xx amount, and they agree to remove the account from the CRA's. If the other party reports in the future they will be liable for damages of let's say $10,000. 6 months later the collector reports the account. At this point you collect the $10K for their mistake.

From what I have read about restrictive endorsement in California, it is a detailed process. Not sure if it has changed since I last read about it, but you would have to send notice first, then send the payment with the legal terminolgy attached.

Pale Rider · 06-25-2008, 06:41 PM

Here is a good example and explanation of liquidated damages:

Common Contract Clauses

and another

Liquidated damages clause legal definition of Liquidated damages clause. Liquidated damages clause synonyms by the Free Online Law Dictionary.

Enigma · 06-26-2008, 12:37 AM

CA has a very specific procedure for restrictive endorsements. You can google it.

It requires you to send a notice a head of time. wait a certain amount of days then send a check that is marked with specific wording.

Whattodo · 06-26-2008, 01:02 PM

Great, thanks for all your help.