Hi all, here is my story: In 2001 and 2002 I co-signed with my father on about $45k of private tudent loans from Citibank for my college tuition (these were promissory notes with Citibank, I believe). In 2003, my father was succesfully sued by an attorney (it was a personal dispute that got way out of hand, I had no part in it) who received a large judgement against him. In order to try to protect his assets, my father declared ch. 13 bankruptcy. After this, I learned that my loans with citibank had been sold/transferred to an insurance company that citibank had a policy with for bad debts. Citibank said it is their policy to get rid of any loans where one of the co-signers files for bankruptcy. I was still in school at this point so no payments were due on the loan and no payments had been missed. Once the insurance company had the loans, they gave them to a CA. I graduated from school earlier this year and have excellent credit (780). The last time I pulled my credit reports 2 months ago, I did not see any bad marks due to these student loans. However, my recently father received a letter in my name from the CA so he wants to resolve this. He wants to settle the debt for less than the full amount ($26k vs. $45k) and be done with it. However, I am concerned that the CA will take our settlement payment and then put bad marks on our credit reports anyway (using an R9 chargeoff or something), and/or sell the remainder of the debt to another CA who will try to come after us again and put their own bad marks on our CR. Below is the sample settlement letter the CA sent us. Do we need to modify the language any to protect ourselves? Do we need to have an explicit provision that no negative tradelines will be listed on either of our CRs? I have searched a lot on this board and looked at the sample letters that others have posted, but I am no legal expert so would REALLY appreciate your advice on the language in this letter. If it matters, my father and I are in FL, the CA is in CO. Not sure if Accord and Satisfaction applies here, since the amount of the debt was never in dispute. And please don't tell me to start the validation process, we are way past that. Letter is as follows: Sample Receipt and Release "Debt Collector" hereby acknowledges the receipt of $xx,xxx from [father] and [son] as of [date], in settlement and satisfaction of the claim of "debt collector" against [father] and [son] for the unpaid balance owing on the promissory notes dated XX 2001 and XX 2002 executed by [father] and [son]. "Debt collector", its successors and assigns, does hereby release and forever discharge [father] and [son] their heirs, executors, and assigns from any claim "debt collector" may have against [father] and [son] for the unpaid balance on the note. The foregoing receipt and release was acknowledge before me by [mr. X] as manager of the "debt collector" this [date]. ___ signature
I would make some changes. Look at these examples: Date: Creditor Address City, State, Zip Re: Account Number Dear Sirs: This letter is an offer to amicably settle the above account. It is not to be construed as an acknowledgment of my liability for this debt in any form. I will pay your company the amount of $____ as full settlement of this account. If you accept this agreement, I will send you a money order or certified cashiers check for the settlement amount of $______ in exchange for a full deletion of all references regarding this account from my credit profile and full satisfaction of the debt. This agreement is binding and will be void should you not hold up to your end of the agreement. Furthermore the debt will be deleted from my credit profile at all three credit bureaus or the bureaus your company regularly reports to in the course of doing business. If you agree to the above, please acknowledge with your signature and return a copy to me. Upon receipt of this signed acknowledgment, I will promptly send you a money order or cashiers check in the amount stated above. Notice: This agreement is restricted. This is not a renewed promise to pay but rather a restricted settlement offer only. By not signing below, you agree that the debt has not been renewed nor has any concrete written agreements been exchanged. Creditorâ??s Authorized Signature: _____________________________ Date:____________ Name Title : Sincerely, Do not sign or date letter (This is necessary to avoid renewing the debt, should the creditor refuse to agree.) Be sure to not use a personal check if they agree to pay. Date My name RE: account # To Whom It May Concern: It has come to my attention that you claim I owe a debt to your agency. As of todayâ??s date, this debt has not been verified as legitimate to me through my FDCPA right. However, since the amount that you claim I owe is such a small amount, I would like to save us both some time & effort by settling the debt with your agency. Please do not construe this settlement offer as an acknowledgment of my liability for this debt, and I retain the right, if I choose, to seek proof that this debt belongs to me. My goal is to seek a settlement arrangement that is acceptable to both of us since this debt is unverified and questionable. I realize that it is your job to collect unpaid debts, but an â??unpaid collectionâ? vs. a â??paid collectionâ? means little to me as both are unfavorable listings on my credit report. Paying this unverified debt would be of no advantage to me, if the listing is applied to my credit report. With that said, I am aware that you have the right to report this debt to the credit reporting agencies, or not to report it at all. I will pay your agency $$$$ as payment in full, for the complete satisfaction of this debt that you allege I owe. In exchange I ask that you agree to full continued absence of all references regarding this account from my credit profile with all of the national credit reporting agencies. I also ask that agree to not to re-sell or re-place this debt with another debt collection agency. If you agree with these terms, please acknowledge with your signature and return this document to me within 15 days. Upon my receipt of this signed agreement, I will within 10 business days mail you a cashierâ??s check for the amount stated above via USPS Certified Mail. No payment will be made without first receiving written confirmation to this settlement. I____________, acting as an authorized agent of (collection agency name goes here) confirm that I the have necessary authorization to settlement this matter as stated herein. I fully agree with the terms set forth by this document, and also agree that if these terms can not be met, no new arrangements will be made and this offer will become null and void. Signature___________________Date______________ Sincerely, my name no signature no date <DATE> Regarding Alleged Account No. <xxxxxx> This is an offer to amicably settle the above referenced account. It is not to be construed as an acknowledgment of liability for this debt in any form, nor will settlement have any affect on the Statute Of Limitations (SOL). Contingent upon the receipt of the amount of $xxx.xx this account is considered paid in full and the matter permanently closed. Terms Required: A) You still have this account and have not sold it to a third party. B) That the account is "paid in full" "as agreed". C) That you will (within x days ) delete all derogatory items with all credit reporting agencies, and copy me on the Universal Data From, (UDF). D) That you will withdraw the account from all third party collection representatives, (if applicable). E) The original trade lines (capitalOne) on all credit reporting agencies will be updated as paid and any other negative notations be deleted. Notice: This agreement is restricted. This is not a renewed promise to pay but rather a restricted settlement offer only to avoid costly and time-consuming litigation. If not signed below by an authorized representative of <CA> and you agree that the debt has not been renewed nor has any written agreement been exchanged. Moreover, an electronically transmitted reproduction, regardless of the means, of this settlement agreement shall be considered as valid as an original and that you are authorized to enter into an agreement on behalf of your <alleged> original creditor. PRINTED NAME ____ No date What is is utmost essential here is the have a clause that all terms of the settlement are confidential (otherwise you'll be getting a 1099 at the end of the year stating your settlement amt is income to you). Also, make sure that what ever you send, you include that your agreement to settle this is NOT an admission of liability for the debt. TYPE you name, NEVER sign and NEVER date it. I think this is all. Good luck.
