If I was offered a deal by a collection agency, how do I make sure I am going about it correctly?

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If I was offered a deal by a collection agency, how do I make sure I am going about it correctly?

I am paying off a debt that is in collections for $1,128.54. The account manager offered me a deal to pay $641.12 in 1 payment to have it paid off in full. I called my father and he said, I need to make a contract statement (on the back of the check above where they sign) saying something similar to, ” his payment is accepted as full payment on account number X, to cash this check is to end said account in zero balance”. He wants to ensure my financial safety and eliminate the possibility of the collection agency taking the $641.12 off of the total amount instead of the deal.

Asked on March 24, 2012 under Bankruptcy Law, Oregon

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Your father has the right idea, but the wrong way to do it. Writing something like "this check is payment in full" on a check does not protect you--the debtor may not unilaterally, without the prior agreement of the creditor (or collections agency) determine what is or is not full payment. If you send the collections agency a check, then regardless of what is written on it, they can apply it to the outstanding balance and look to come after you for the rest.

What you want to do is to get them to sign a written agreement BEFORE sending them a check, which agreement states that they will accept $641.12 as payment in full of the debt; further, you want the agreement to be clear that the debt will be considered satisfied, not in default.

Once they sign that, then you could send them the check to settle the matter. Get the agreement first and make sure it's in writing; then pay.


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