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Debt Collection: Does the collection agency have to put settlement agreement in writing?

Granada Hills, CA |

I have reached a settlement with a collection agency which involves monthly payments (plus a ridiculous "convenience charge"). I've asked for an agreement in writing, but so far they have refused to do so.

Is there any debt collection law that states that they need to put it in writing if requested? If not, I suppose plan be would be to record the call -- tell them I'm recording it, of course (California) -- and documenting it that way.

Your input is appreciated.

My thanks to each one of you...these are all very good answers. I one last letter explaining I need a settlement agreement in writing, so I'll see what happens.

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Attorney answers 5


I think everyone who has responded has provided very sound feedback. My personal view on this is that I would never recommend that a client pay anything to a debt collection company without having an agreement in writing. There is no reason whatsoever for the company to not put the agreement in writing and will only make it difficult for you to say that there is a contract (the agreement) that exists if they elect not to honor it.

I have encountered multiple clients who have had a settlement agreement in place, but not in writing, have been complying with the settlement terms for several months or more, and have been sued on the remaining amount anyway, because by the written terms of the original credit agreement, they were in default.

Some collection agencies do a very good job and wouldn't pull a dirty trick like I described again. From my experience, the ones who won't put a settlement agreement in writing do not fall in this category of doing a good job. I wouldn't trust them.

I don't know the rules for recording conversations in California. Where I practice, Minnesota, it is legal if only one party to a conversation consents to a recording. Some states require that everyone be aware. If you are able to legally record your conversations, it would likely be sufficient to support your breach of contract claim if they would breach the terms. It also may be sufficient to establish a fraud claim.

Their attempted settlement also may be in violation of various consumer protection statutes. A debt collector cannot make demand for more money than it is actually owed by the terms of the contract. The convenience fee may be problematic, depending on the language used in the governing contract.


Don't pay a cent until/unless the creditor itself (not the collection agency -- the one who owns the debt) signs the settlement agreement.



Can you please elaborate? I've never heard that before.

Susan Kathryn Ashabraner

Susan Kathryn Ashabraner


A written contract cannot be successfully enforced unless the "party to be bound" by the terms of that agreement signs it. The "party to be bound" in your case is the creditor, not the collection agency (the creditor's agent).



Ah, thank you.


They do not have to put it in writing unless you insist which I do for all of my clients. The agreement should have the account number, the terms of repayment and a release from the creditor.


They often don't and there is no legal requirement that it be in writing. That is why I have three legal guides on the subjects of: settling a debt collection (#1), getting the settlement in writing even if the other side refuses (#2) and terms to include in the typical settlement agreement (#3). Please see link below, to my legal guide #2, on Avvo. If you find the guides useful, please mark them with a "thumbs up." Thanks.

Robert Stempler (please see DISCLAIMER below)

NOTICE: The above statements are provided for general information purposes only and are not intended as legal advice or advice of any sort for a specific case or legal matter. If you do not have a signed attorney-client fee agreement with the Consumer Law Office of Robert Stempler, APLC ("the Firm"), then until such written fee agreement is provided and signed by both a prospective client and attorney for a particular case, neither Mr. Stempler nor the Firm will represent you nor will they be your attorney in any matter and you remain responsible for retaining your own attorney and for compliance with any and all deadlines and for any statutes of limitations that may pertain to potential claims. Comments made on a public forum, such as, to not have any confidentiality because others may read them. If you desire a private consultation with Mr. Stempler that is confidential, please go to and submit a free eCase Review.


First of all, their demand for a "convenience fee" may be an illegal debt collection practice, in violation of federal law and of California law. It is a violation for a debt collector to demand even one cent more than the amount supported by a judgment or a written agreement with the original creditor. In such a case, you can sue and recover "statutory damages" of between $100 and $1,000, plus any actual damages, damages for aggravation and distress, and attorney's fees. Just tell the collector, straight out, that you want them to send you a letter (by mail or fax), itemizing their claim (including any interest, fees and other charges), identifying the original creditor, and stating that the debt has been assigned to them, i.e., that they "own" the debt. No written demand and settlement offer, no settlement. If they do send such a letter, talk to an attorney. An attorney's threat to sue them for violation of the Fair Debt Collection Practices Act may cause them to drop the whole thing. Also, in any settlement, you need to specify how the account will be reported to the credit reporting agencies and whether the collection agency will send a 1099-C form to the Internal Revenue Service.

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