If you make an agreement with a company to make payments and they revoke the agreement, what are your obligations?

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If you make an agreement with a company to make payments and they revoke the agreement, what are your obligations?

The company has agreed to accept $5 a month and sent us an agreement letter stating it was arranged. We are low income and cant afford more but they have accepted the first payment and then denied the payment every month sending it back with a letter saying it isn’t acceptable. They are refusing the agreement they have set with us. What are the legal obligations on our part? I have been told once they agree to the payments and accept the first one they have to accept all of them otherwise our business is null and void and we no longer owe them because they are refusing our payments.

Asked on June 12, 2012 under Bankruptcy Law, New Mexico

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Once a creditor or its collections agent agrees to a payment schedule, they are contractually obligated to that schedule; so long as the debtor honors his or her obligations (that is, pays on time), the creditor has to honor the agreement, too. If you have a letter (a written agreement) to the schedule and furthermore, the evidence of them accepting payment per the schedule and your testimony as well, you should be in a good position if they try to sue you--you could raise the agreement as a defense and seek to have the court enforce it.

Keep sending them the payments as per the schedule, and ideally send them some way that you can prove delivery (e.g. registered mail with return receipt). Keep all receipts, canceled checks, correspondence, etc.


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