I was doing my usual credit search and found this. might help someone out, Some collection agencies will agree to settle with you for far less than you owe and then turn around and hire another collection agency to collect the difference. However, in many states this is illegal. Once a creditor deposits or cashes a full payment check, even if she strikes out the words "payment in full," or writes "I don't agree" on the check, she can't come after you for the balance. The states in which this law is enforced include: Arkansas Colorado Connecticut Georgia Kansas Louisiana Maine Michigan Nebraska New Jersey North Carolina Oregon Pennsylvania Texas Utah Vermont Virginia Washington Wyoming Some states have modified this rule. In the following states, if a creditor cashes a full payment check and explicitly retains his right to sue you by writing "under protest or without prejudice" with his endorsement, then he can come after you for the balance. But those exact words must be used. If he writes "without recourse," communicates with you separately, notifies you verbally, or writes on the check that it is partial payment, it is not enough. Alabama Delaware Massachusetts Minnesota Missouri New Hampshire New York Ohio Rhode Island South Carolina South Dakota West Virginia Wisconsin
A restrictive endorsement,or any other agreement, even if it is written in blood, is ONLY binding on the CA who signed the agreement.It is true they cannot HIRE another CA, BUT THERE IS NO prohibition against their SELLING the balance to another CA who can do whatever they want.In those cases where people, some of whom have posted their "successful" credit repair strategy on the board, the "new CA" may not show it's ugly face for a year or more after the"settlement".
I still don't see how that is possible, when they are bond by law not to sell, or try to collect. what am I missing?
Could you just settle with the OC and then have the neg info from the CA taken off your CR AFTER you settle with the OC?
You are missing the fact that the restrictive endorsement cannot negate their property rights in the ownership of the account. It is called "restraint of trade" You can stop them from collecting further on the account, you can stop them from hiring or appointing an agent to collect on the account, but you cannot stop them fom legally SELLING their own property, YOUR ACCOUNT BALANCE DEBT. The ONLY way that I have found to be reasonably sure this isn't done, is to put an additional restrictive clause in, stating that they will be considered to be in vilation if they resell any interest in any balance to any entity for the purposes of further collection activities.(did you know that there are collection agencies that specialize in buying accounts for archival purposes?, they resell the data to marketing companies)
You need to read about accord and satisfaction. If they agree that the payment is in full by signing a conditional endorsement, they cannot sell the remaining balance so long as the accord and satisfaction letter is crafted correctly.
