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Does a letter of intent to pay a debt (with details as to how I will pay) help avoid legal proceedings? (debt is medical bills)

Athens, AL |

My daughter (18 mos) has had several occasions of illness and has accumulated over $1000 in various bills. I have been unable to pay several of the bills, but I intend to use income tax money to pay off all outstanding accounts. Some of the accounts have been turned over to collection agencies. I am needing to know is, if I send letters of intent to pay with details as to how I will repay these debts to the agencies, companies, etc., will this avoid legal proceedings on these accounts. I do intend to pay; I have just been unable to this past year due to limited income.

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Attorney answers 5


I am not admitted in Alabama, but I negotiate the resolution of debts in the states where I am admitted. I have never heard of such a thing. I do recommend that clients send a "hardship" letter when their accounts initially go delinquent. The letter basically tells the creditors why the clients have not paid (usually because of a hardship - whether its job loss, pay cut or medical reasons). The letter also asks that the creditors not call the client at work. The creditors don't care but many honor the request not to call work.

However, this does not work with collection agencies. And sending the letter does not mean you will not get sued. I would not include any payment arrangement at all. I would just state (again in your hardship letter to original creditors, not to debt collectors) that you will contact them when things improve for you.

If and when you have the funds, then you call the creditor or debt collector and work out a deal to resolve the account. Do not get the creditors stirred up until you have the funds - when you tell them you have money they are like a shark that smells blood in the water. If you don't have the money, its better for you to say nothing.

Remember that when you do go to resolve an account, if you are settling for less than the full amount, before you send off the money, get the terms of the deal in writing - what is owed, what the settlement amount is, to whom paid, where the settlement is sent and by what date. I recommend that any payment be made via cashiers check or money order which you make a copy of before you send. You should send the settlement funds via UPS, FedEx or some other way that you can track delivery. Keep a copy of the settlement letter, check and tracking information forever. Debts have a way of resurfacing.

Better yet, if you can afford to do so, you should consult a lawyer who handles credit card or other unsecured loan defense or FDCPA violations to have the lawyer resolve for you.


Technically no. They can file suit at any time. Talking to them usually helps. Try to work out small payments until you can pay them off.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Alabama. Responses are based solely on Alabama law unless stated otherwise.


Such a letter will not preclude your creditor from filing a lawsuit against you; however, it may help postpone it. You should also be aware that the Fair Debt Collection Practices Act provides significant protection to consumers against harassment by debt collectors. If you are being contacted by any debt collectors, you should consider contacting an AL attorney specializing in the consumer protection field. If this attorney finds that a debt collector violated your rights then this could lead to significant, if not total, debt relief and even to the debt collector paying you money.


The analysis of how a financial situation is approached, in my opinion, changes when an original creditor turns their debt over to a third party debt collector in order to collect a debt. Please see our website for a description of the applicable law which is called the Fair Debt Collection Practices Act (FDCPA). Additionally, we will have a blog post about this specific area of law posted on December 3, 2012. The first thing you should do is to get all 3 of your credit reports from By getting your free credit reports in this manner, you will then have a good handle on exactly what you owe and who is trying to collect on you. I would then suggest you contact a consumer attorney of your choosing ( or a bankruptcy attorney ( to discuss your options. Many attorneys who practice in this area offer a free consultation visit and you can learn all of your options. Best wishes.


Since you intend to pay with your income tax money it is doubtful that they will be able to sue you and take a judgment before you get your tax refund assuming you file as soon as you get your 1099's or W2's and assuming that the IRS pays you and doesn't challenge your refund for any reason. You have to be served with legal papers and if you tell the attorney that sues you that you agree to with a settled paying arrangement sometimes you can negotiate a payment plan that will work with your budget and anticipated tax refund. Get the arrangement in writing though and if you can't do it for yourself hire an attorney to help you with this.

There are many factors that can affect how best to handle this matter and the best advise is usually to hire an attorney immediately. Unfortunately the advice above is a guess that is based on very scanty facts. Circumstances of all sorts can change the ultimate answer you need. If you want to know how best to handle the situation, make an appointment with an attorney and get good solid advise based on more exact facts. The money spent might give you the peace of mind you need. The information provided is not intended as legal advice that can be relied on in part because we do not have the entire the situation. No Attorney/Client relationship is intended, implied or created. We are a debt relief agency and we help people file for relief under the bankruptcy laws.

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