payment agreement mistake

Anonymous · ‎02-12-2011

Agreed to a payment agreement, but now I realize that it states that there will be a remaining balance after last payment is made. I called CA and they said that only a 6% interest will be accumulating. If I send a letter asking for a detailed breakdown of the charges that will accrue on this balance, do they have to comply. I live in Texas, and the original creditor is Sears. What kind of charges can I expect to be added. Will they sue me if I refuse to pay anything after the last payment. I will be paying amount in full in 12 monthly payments.

Transunion - 679

Equifx - 669

Experian - 778

Anonymous · ‎02-13-2011

CA had originally offered a settlement of 60% of the debt. Their letter did stipulate:

"Once the settlement amount has been received and the funds have cleared for payment, you will then be

released of any further liability to CITIBANK, and its agents in reference to this

account. In return, we will then notify our client the account has been settled in full and that your credit

bureau should be updated accordingly.

If I try to renegotiate a settlement instead of the payment arrangement, how likely are they to agree. Maybe they'll prefer

to receive their money in a lump sum instead of 12 monthly payments.

IOBA · ‎02-13-2011

What are you trying to achieve with them?

Based on what I could read (that really tiny, tiny print), they will not sue you for the other 40%. They will consider receiving the 60% plus 6% interest as paid in full.

What will probably show up on your CR is "Settled for less than full amount". As I understand it, that is about as bad as a "charge off". If you paid it in full, then the records would reflect that.

Also, if you paid it off in one lump sum now, I doubt anyone will make a fuss about it. They might like it!

Anonymous · ‎02-13-2011

I think you missed my 1st post.

I had originally been given a settlement offer, but I didn't have the $900 they were asking for so then they offered a 12 month payment arrangement for the full amount.

The payment arrangement is what I'm paying. The payment arrangement letter says "Please call after the last payment to discuss a resolution regarding the remaining balance. This is what worried me. I'm paying the full amount so what remaining balance could they possible be talking about. They said it was a 6% acruing interest charge.

I mentioned the settlement because that letter did state the $900 would be a full and final settlement. Maybe I would have been better off having taken the settlement offer. I was just wondering if it would be better to go back and offer a settlement for the remaining balance. Would they even agree? I've given 1 payment on the account.

IOBA · ‎02-14-2011

It sounds like the company is setting up a one year payment plan. If things go well with that, then they will set up another payment plan to finish paying off the debt (which it sounds like they are saying will be interest only).

If you have concerns about any of it - ask them to give you a break down of how they calculate the balance. They must tell you what is principle and what is interest and how payments are applied.

Yes, you can call them up and ask them if they would accept xxx as a settlement amount to satisfy the debt. If they say yes, make sure you have a letter from them that states the debt is considered paid in full and no more money is due. (That way no one can come after you for the unpaid balance.) Do this before you pay them the settled amount.

I hope this helps you make an informed decision.

MarineVietVet · ‎02-14-2011

Locking this thread. There is almost an identical discussion going on here: http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Help-Collection-Agency-concern/m-p/842652#M12....