How can I make a payment proposal regarding a debt legally binding?

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How can I make a payment proposal regarding a debt legally binding?

I have been contacted by a collection agency regarding a debt. If I send back a check for a down payment and a response letter laying out a payment plan and state that by cashing the check they are accepting the terms that I have proposed, would this become binding? I also plan on noting the same on the check itself and making copies of the check and letter together.

Asked on May 18, 2011 under Bankruptcy Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It is a common misunderstanding that a debtor can send a check which either has written on it or accompanying it a payment plan or terms and the statement that "by cashing this check, you accept these terms" and thereby create a binding agreement. This is not true.

To create an agreement, there must be offer, acceptance, and consideration--something given, which binds the agreement. The problem is, if there is already an obligation to give that money or that item, etc., then you cannot be given as consideration--the other party *already* has a right to it, so they are getting nothing new. If you are already obligated to apy a debt, any payments you make toward that debt go to an *existing* obligation; they cannot serve as consideration for a new agreement.

There is no way to make a creditor accept a repayment plan; accepting a plan requires the creditor's voluntary agreement to it.


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