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What should I make sure are included in a debt settlement agreement?

Asked in Tolleson, AZ - 7 months

I am about to enter into a CC debt settlement and before I sign anything, I want to be sure that I am protected. What should I be sure is included in any debt settlement agreement and what should I ask for?

Attorney Answers (4)

Douglas Garth Edmunds

Douglas Garth Edmunds

Gilbert Chapter 7 Bankruptcy Attorney

Licensed in AZ

Answered 7 months ago. First, hire an attorney to review it. Since you are not likely to do so, then you can make sure of a few things. Make sure the lump sum payment or monthly payments are something you can actually handle. Do not over-commit as the odds of a second settlement tend to be lower. Second, the settlement should include a complete and full satisfaction of the debt once paid with clear language specifying that they will forgive the balance. We do not want the balance sold to a third party. These are the most important items, but without knowing the extent of the debt, the terms, and reviewing the document itself, it is difficult to get more specific.
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Stacy E Scheff

Stacy E Scheff

Civil Rights Attorney

Licensed in AZ

Answered 7 months ago. You should definitely consult with an attorney. You may be able to get a low-cost consultation that will save you more than you spend on it. An attorney can tell you whether the debt is even collectible - the statute of limitations may have passed and you might not have to pay anything. Also, confidentiality regarding the settlement can be tricky, as well as making sure the entire matter is settled so they can't come after you again after you thought you'd settled it.
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Eric Jerome Gold

Eric Jerome Gold

Murrieta Estate Planning Attorney

Answered 7 months ago. Without a review of the document or an outline of the facts surrounding your circumstances, this forum will not be able to provide you with a comprehensive answer. That being said, you should certainly have a local attorney (preferably a debt settlement attorney) review the settlement agreement. The bit of money you spend may save you greatly down the road. If you chose to do this yourself, be sure that the agreement indicates that it is a full and complete satisfaction of the underlying debt. Be sure that your agreement as to any deficiency (1099C for cancellation of debt) is included. If your credit report is an issue be sure that is addressed as well.
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1 comment

Frederick Charles Thomas

Frederick Charles Thomas

Phoenix Contracts / Agreements Lawyer

Licensed in AZ

Answered 7 months ago. First, to reiterate what the others have stated, pay an attorney to at least review the settlement agreement. Also I agree with the salient terms the others have referred to.
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