After you pay a creditor an agreed amount on a debt to be paid in full, can they ask for more money?

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After you pay a creditor an agreed amount on a debt to be paid in full, can they ask for more money?

I received a settlement letter from a debt collector; the amount owed was $2668. In the letter it says that if I pay $750 (broken into 3 installments of $250) the account would then be paid in full. After paying it. I called to ask about my status and the lady said that there was a mistake in the letter and that the amount should have said $2750 not $750. First of all that’s more then what I owed and, second, $250 x 3 isn’t $2750. After I said thaty I would have to talk to a lawyer she said that she could refund my money and that since it was their mistake all she wants is $535 more. Is this legal? What should I do?

Asked on January 3, 2012 under Bankruptcy Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you received a settlement offer, accepted its terms, and complied with its terms, then that offer was a binding contract between you and the debt collector and they would be bound to its terms. It is sometimes possible to overturn a contract if of either of the following existed: 1) mutual mistake--both parties thought it meant something other than what it did; or 2) unilateral mistake plus fraud--that is, you basically tricked them into agreeing to the wrong thing.

From what you write, it would appear than neither of these conditions existed; therefore, you'd have a good chance of holding them to this agreement. On the other hand, if they sue you, they *might* win--lawsuits are never certain--and defending yourself from a suit has its own costs. You may wish to consider whether it would be worthwhile taking the offer (make sure its firm in writing!) to avoid possibly being sued.


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