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Vineburg, CA |

Let's say you make a settlement deal with credit card bank X. You make the agreed upon payment, and they twice send you confirmation letters of the agreement which also states you don't have to pay the remaining balance as long as no further charges appear, that the forgiven amount would be put on a 1099, etc. Can they still add interest and/or fees and send you monthly billing statements?

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Attorney answers 3


Once you agree to a settlement with a credit card company and perform your obligations in full, they may not bill you for anything - the debt has been settled according to an agreement. In the event that the creditor is continuing to report the debt as due and outstanding on your credit reports, you should dispute that tradeline in writing directly with the credit reporting agencies (enclosing copies of the settlement agreement and cancelled check endorsed by the creditor); a failure to update the account on your credit report may be grounds for a lawsuit for violating your rights under the Fair Credit Reporting Act.

In the event that a debt collector begins dunning on the debt, you may have a cause of action for damages under the Fair Debt Collection Practices Act.

First-party creditors (i.e., the original grantor of credit) are not covered under the FDCPA, but your state may provide for recourse under state laws.


I don't think I can add anything to Jay's excellent response, except a link to the NACA lawyer database, where you can find a consumer lawyer in your area to help you understand your options. Ron Wilcox is a NACA lawyer in San Jose, but you might be able to find someone closer.


I agree with what Jay said. His advice is perfect. The only thing to add is that, in California, the original creditor is covered by the Rosenthal Act. The Rosenthal Act incorporates the FDCPA and would give you a case against the original creditor if they continue to add interest or send demands for payment.

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