[Whattodo]

The following letter is what I have drafted so far. I've tried to incorporate what this board has graciously advised and from info. I have read. Just want your critique before sending. Thanks!

Dear Sir or Madam:

I received a letter on (date) in regards to account # ( ). In regards to a settlement, I borrowed $ in which to pay this debt. In exchange for payment, the following would apply to this account:

1. The payment received is in full and cannot be sold, bought, tranferred to or by anyone else. The Collection Agency (I typed in their name) agrees not to take further action to collect on this debt

2. Any negative or derogatory information in regards to this account that has been reported by CA and the original creditor will be deleted from all Credit Reporting Agencies (CRA) within 10 days of cashing money order or cashier’s check. The collection agency will agree to never, at any time in the future, place any information on the consumer’s credit report

3. This agreement shall superceded all previous contracts between parties

4. Should CA fail to remove the listing or reinsert it at a later day, CA agrees to award liquidated damages of $5,000.00 to the consumer (my name).

If the consumer fails to pay the compromised amount by August, this contact will be immediately terminated.

[Enigma]

Read what you wrote.

[Whattodo]

Reread and not quite sure what you mean. This is been pretty daunting to me, just doing my best. I'd appreciate anyone's explanation.

[Whattodo]

You were right Enigma. I did take out some of the wording where it was redundant. How does it look now?

Dear Sir or Madam:

I received a letter on (date) in regards to account # ( ). In regards to a settlement, I borrowed $ in which to pay this debt. In exchange for payment, the following would apply to this account:

1. The payment received is in full and cannot be sold, bought, tranferred. The Collection Agency (I typed in their name) agrees not to take further action to collect on this debt

2. Any negative or derogatory information in regards to this account that has been reported by CA and the original creditor will be deleted from all Credit Reporting Agencies (CRA) within 10days of cashing money order or cashier’s check.

3. This agreement shall superceded all previous contracts between parties

4. Should CA fail to remove the listing or reinsert it at a later day, CA agrees to award liquidated damages of $5,000.00 to the consumer (my name).

If the consumer fails to pay the compromised amount by August, this contact will be immediately terminated.

[Enigma]

I look it over later tonight.

[Whattodo]

Thanks Enigma, I appreciate that.

[Whattodo]

I wondered if Enigma or anyone out there can give this a look-over. TY

[Enigma]

Originally Posted by Whattodo

I wondered if Enigma or anyone out there can give this a look-over. TY

CA allows for restrictive endorsements but the rules are strict. I've been doing a little research.

[Whattodo]

I've been researching res. endorsement in California as well. Here's what I've found:

A letter has to be sent to the creditor stating, "a check will be tendered with a restrictive endorsement and acceptance and cashing of the check or draft will constitute an
accord and satisfaction." They are essentially forewarned. The debtor then follows-up by sending check within a certain time period (not less than 15 days or more than 90 days of sending the letter).

I also read that a good faith dispute has to be a prerequiste for an "accord and satisfaction" settlement. I'm thinking since the CA stated they have been given permission from the OC (Sam's Club) to settle, they will be willing to do so.

[Pale Rider]

Originally Posted by Whattodo

I also read that a good faith dispute has to be a prerequiste for an "accord and satisfaction" settlement.

Texas has similar wording. This is the part that trips up a lot of folks. You can't just dispute because it was rainy on a Tuesday that fell on an odd numbered day. It has to be a real (legitimate) dispute about the balance and the settlement amount should the lesser amount you claim to owe.

That doesn't stop you from negotiating a better settlement. But an RE would not be valid for another amount.

[Enigma]

Originally Posted by Pale Rider

Texas has similar wording. This is the part that trips up a lot of folks. You can't just dispute because it was rainy on a Tuesday that fell on an odd numbered day. It has to be a real (legitimate) dispute about the balance and the settlement amount should the lesser amount you claim to owe.

That doesn't stop you from negotiating a better settlement. But an RE would not be valid for another amount.

PR,

Are you thinking like I am that a RE really cannot be used until you admit the debt is yours?

I am thinking that it would be better to go for a settlement whereby no liability is admitted to.

[Pale Rider]

I thought about that as I posted last night. The requirement to have a legitimate dispute would almost force you to put some type of wording in about the circumstances of the debt, and how you came to a lesser amount. Not sure if the other states that allow an RE have similar wording. Another good reason to know exactly what you are sending before a copy/paste of a form letter. The best scenario, if you do not want to admit to the debt, is to make a lump sum payment without the RE.

I would also have the opinion that any type of settlement that had a payment plan would restart, or have a new, SOL and create a new accord and satsifaction. The new agreement would have it own 7 year reporting period, and any default would have a new SOL. The FTC has a couple of opinions on this. The data furnisher would be unable to link any negative info from the old account, and the new agreement could be reported as a seperate tradeline. The data furnisher is also limited to reporting transaction 'from their own experience". So a JDB would have several reporting isues on this type of agreement.

I believe the companies that offer a new credit card to settle a charge off would fall under these guidelines. I had that sitaution years ago with Cap 1 before I found any of these sites. I now have a good tradeline on the reports and an open CC from that.

[Hedwig]

I've never been a big fan of restrictive endorsements. Why not just set out your terms in writing and have it signed by both parties, thereby forming a contract. That way you could even include language such as "I do not acknowlege this debt, but in an effort to restore my credit.....," couldn't you?

But I guess that would reset the SOL if payments were involved, because it would be a new contract.

[Pale Rider]

I could see where an RE would have it usefullness in a legitimate dispute, where a company or collector wanted full amount and you owe considerably less. There may have been payments not credited, or quality of goods issue. The RE just reinforces that they accepted a good faith offer, and now they have no claims. It is not an everyday solution to negotiating, but it could be useful.

[Whattodo]

Originally Posted by Hedwig

I've never been a big fan of restrictive endorsements. Why not just set out your terms in writing and have it signed by both parties, thereby forming a contract. That way you could even include language such as "I do not acknowlege this debt, but in an effort to restore my credit.....," couldn't you?

But I guess that would reset the SOL if payments were involved, because it would be a new contract.

Any chances of getting them to accept a lump sum payment (although it is less than what is owed) and remove any negative marks from the CRA's without a restrictive endorsement? I guess I would have to get them to agree to those terms in writing.

[Whattodo]

If I don't use restrictive endorsement, than would it be advisable to just try to settle by making a lump sum payment (without acknowleging the debt as mine) and have the CA first sign a letter stating they will remove the negitive tradline from my credit report? It seems as if they are willing to negotiate.

[Hedwig]

That's what I'd do. Get it in writing, but it doesn't have to be an RE. If they sign an agreement, that becomes a contract. If they don't do what they promised, they have breached the contract.

[Whattodo]

Great, thanks Hedwig.