Collection Agency mails me a letter confirmation of our settlement agreement. On their agreement it notes the current balance, account # and payment due date and on the bottom it says that "the amount due on the day you pay may be greater due to interest/other charges." With this said, I drafted my own Settlement Agreement which I mailed along with my payment. On my agreement my terms were:
1. The agreed lump sum payment
2. accepting the payment will serve as a complete discharge of all due bills
3. Collection Agency will report to credit bureaus that account is paid in full for less than full balance
Then keep negotiating.
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4 lawyers agree
Your terms are reasonable, so if the collection agency does not agree, then keep negotiating.
In the unlikely event that the collection agency files a lawsuit, you ought to retain defense counsel to defend it vigorously.
Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This Avvo.com posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult with your own attorney.
Estate Planning Attorney
It seems as though you are taking a solid approach. Continue negotiating with the creditor until you can come to agreement. I would strongly recommend that you consult with a local debt settlement attorney to be sure that your final settlement agreement is acceptable and that it accomplishes your goals, before sending in any money.
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Debt Collection Attorney
Get an attorney to help protect you. The settlement agreement must be signed by persons with proper authority. The report to the collection bureaus should be done by the creditor who reported the account. If the original creditor reported the account, the original creditor must promise to remove the negative information. An authorized agent or officer of the original creditor must sign. You might want the creditor to report the account as "delete tradeline", as this is better than a paid collection. What about the 1099-C form that you will receive next January?