Which state law controls a debt settlement – the debtor’s home state or the collection agency’s home state?

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Which state law controls a debt settlement – the debtor’s home state or the collection agency’s home state?

I read that even if you settle with a collection agency they can put on the money order that they do not agree with the payment as full amount for debt. I learned that some states allow them to sell or go after you for the rest of the money.

Asked on February 12, 2012 under Bankruptcy Law, Illinois

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The law of the state where the judgment was entered against the judgment creditor controls with respect to your question. If you have some monthly installment payment or payment in full of the judgment against you, make sure that there is a written agreement signed by the judgment creditor or his or her assignee and as part of the final payment you get a document entitled "full satisfaction of judgment" so that you can have it filed in the case where the judgment arose.


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