I've been doing credit repair for a number of months now to great effect. I managed to get my student loans removed from my credit reports to my glee, but of course they were still not paid (they've been in default for years and years) and were subsequently referred to another collection agency. This made me concerned that they would be re-reported and re-inserted into my credit reports, and probably not as easy to dislodge a 2nd time. So, I sent a "cease contact" letter to the collection agency and contacted the lender. Using a similar strategy to some of the other repair techniques I previously employed, I wrote up a settlement letter and sent a restrictively endorsed check to seal the deal. They cashed the check. Now- as I understand it, this creates a legally binding agreement with my lender, as a check is a legal document. Do I now have this matter well in hand, or do they have a way to rebutt against this despite the fact that they cashed a check that was connected to an agreement? I've received nothing in writing from them after one month. My wife is going through something similar on her own loans. She sent a restrictively endorsed check with a settlement letter, which they cashed. She followed through with her part of the agreement and paid a lump sum, also using a restrictively endorsed instrument, which they also cashed. The collection agency, however, is still insisting that the loan is not paid, even though they cashed two restrictively endorsed instruments. I know that collection agencies lie and intimidate to accomplish their goals, and I have no doubt that they'd resort to lying about this so that they don't have to admit to the lender that they were had and it was their own fault. Again, do they have even a leg to stand on here? Or has she won? Thanks for your feedback!
Restrictive endorsements are not recognized in some states. They can cash the check and you will still owe the balance. Some CA's will write 'with prejudice' on the back of the check, so they can come after you later. The better way to do this, is to send a letter to the CA with the settlement agreement, when they return it to you signed, then send them a money order or cashiers check. I hope you did not send a CA a personal check. If you did they now have your banking info.
Thanks for the tips. I tried looking up issues pertaining to restrictively endorsed checks, and was not able to find any, which is why I am asking here. Can you point me towards information that will shed light on the matter, especially in regards to student loans? Thanks for the help!
If these are federally-guaranteed student loans, you may have a bigger problem than credit reporting. There is no SOL on student loans, and if they're federally guaranteed, the federal government can withhold your tax refunds or any other money you are due from the federal government. I don't know if settlements are allowed on student loan debt. If they are federally guaranteed, you may want to contact the Department of Education about this. It won't go away.
>>>If these are federally-guaranteed student loans, you may have a bigger problem than credit reporting. There is no SOL on student loans, and if they're federally guaranteed, the federal government can withhold your tax refunds or any other money you are due from the federal government<<< Yes, I am well aware of that, unfortunately. As I mentioned, I've owed these for years and years and want to finally get them taken care of so I can move on with other things. >>>I don't know if settlements are allowed on student loan debt. If they are federally guaranteed, you may want to contact the Department of Education about this. It won't go away<<< No, it won't, but if I can settle it for less than I owe I'll be happier. What I'd like to know at this point is if their cashing of a restrictively endorsed instrument has successfully created an enforceable agreement with them. I doubt the DoE will be cooperative in telling me the answer, but I will try. Impartial information from those who are more familiar with the laws involved would be most helpful. Thanks!
They can "TAKE" your tax refund... Won't go away!!! Many people have made like 12 "ON-TIME" payments and they got rid of the "BADDIES"
C'mon - creditors today aren't THAT stupid. Almost all Consume Credit contracts have a provision in the fine print that disavows restrictive endorsements. The purpose of a restrictive endorsement, under the Uniform Commercial Code, is to finalize disputed items with full payment where each side has full knowledge of the dispute, the restrictive endorsement and its terms. Most consumer payments are handled by clerks at a lock box. I doubt the enforceability of your restrictive endorsements.
"We do not accept checks with restrictive endorsements...we return them to you un-cashed and if you are late with the next check, you may be subject to a LATE FEE...if we cash the check by mistake...we are NOT obligated to any words of the restrictive endorsement"
playing devils advocate here: what if you have no sort of "written" contact, ie, collection w/say medical or telephone company?
