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

Tolleson, AZ |

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?

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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.

When responding to questions posted on Avvo, I provide a general purpose response based on California law as I am licensed in California. In reviewing my response, you are specifically advised that your use of, or reliance upon any response I provide is not advisable. I do not have all relevant background details or facts related to your issue / matter, thus I am not in a position to give you legal advice. Further, your review, use of, or reliance upon my response does not establish an attorney-client relationship between us nor does it qualify as a legal consultation for any purpose. For specific advice regarding your particular circumstances, you should consult and retain local counsel.

Bradford Wayne Botes

Bradford Wayne Botes


Have an attorney review the agreement. You may think that our encouragement to hire an attorney is self serving but I have seen far too many of these type agreements screwed up. Furthermore, there may be larger question as to whether you should settle the debt at all. Has the statute of limitations run? Are you dealing with the original creditor or a debt buyer? Do you have other debt? If so, you should at least explore your bankruptcy options. Best wishes!


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.

Douglas Edmunds is in the business of helping people and companies file for bankruptcy protection. The bankruptcy code requires that I call my firm a "debt relief agency." Any answers or information provided is for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the legal issues. This is not intended to create a attorney-client relationship. Each individual's situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state for specific information.


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.


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.

The above statement does not create an attorney-client relationship and the submitting party should not consider the responding their attorney.

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