If you send a payment to a collection agency and they cash your check does that set the payment plan and do they have to send you a monthly statement?

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If you send a payment to a collection agency and they cash your check does that set the payment plan and do they have to send you a monthly statement?

Asked on November 20, 2011 under Bankruptcy Law, Indiana

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you simply send a check to a collection agency for a past due account and the check is then cashed, unless there is a written agreement signed by you and the collection agency setting forth a monthly payment plan on the debt, the payment does not in and itself establish an agreed payment plan.

I suggest that you contact the collection company and try and establish an agreed monthly payment plan. You should get a statement from the collection company acknowledging receipt of your payment.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If someone cashes a check when you owe them money, that does not itself set or determine a payment plan: if you send someone to someone to whom you owe money, they may cash or deposit it without affecting their rights.

On the other hand, if you and they had agreed to a payment plan, then that plan is enforceable so long as you honor your obligations--such as paying as per the plan. Therefore, the agreement to the plan must come first, then sending them the check under the plan is part of you obeying the plan, and, so long as you do, they will be held to their obligations under the plan. So set up the plan first; don't send the check and hope that doing so will force them to agree to the plan.

Whether or not they have to send a monthly statement depends on what was agreed to between you and them in regards to it--if the payment plan included a requirement for a monthly statement, they'd have to send one.


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