There are some CA's that will not agree to a PFD or claim they "don't do that" and say they will only update to PIF. I have had substantial success, personally, sending a letter of offer with a conditionally endorsed check. Sometimes having the check in hand prompts a different results. However, it cannot be "snuck" by them, it must be clearly communicated what the offer is.
PFD is based upon the doctrine of accord and satisfaction. Your PFD offer is legally called an offer of accord and satisfaction. In order for an offer of accord and satisfaction to be valid there must be three things:
1. The debt in question must be unliquidated or of a bone fide dispute
2. The alleged debtor must tender in good faith an instrument and offer of accord
3. The lender/creditor must accept and receive payment by the instrument (check)
Unliquidated means that the debt is not specific or broken down line item. If the CA did not validate the debt, then this usually qualifies as unliquidated. If you have disputed the debt through the CRA and DV letter to the CA, then usually this would be a bone fide dispute.
Your offer of accord (meaning to settle, usually for less than originally alleged due, but not always) must be sent to the designated address and/or person specified by the CA if you have received a notice of a specific location or person to communicate with.
Here are some links to look at for definition and information:
http://en.wikipedia.org/wiki/Accord_and_satisfaction
If not properly conducted, they may not be binding:
http://www.allbusiness.com/finance/686973-1.html
Your offer must clearly show that it is an offer of accord "being conspicuously" marked. And the debt or amount of debt must be previously and honestly in dispute. So, do not make this your first step in resolution.
SPECIAL CONSIDERATION: Sometimes a CA may put a stamp or write on the back of the check "DOES NOT CONSTITUTE PAYMENT IN FULL" or "WITHOUT PREJUDICE" and deposit the check as a partial or even full payment (depending on the amount you tendered) without abiding to the terms. In these cases, I have used an attorney to write a letter to the CA explaining the law and nature of their actions. In my cases, they have agreed to abide by the terms. However, it is possible that you will have to then take additional legal steps to enforce the terms. If they do not honor the terms, they are responsible to refund the amount of the check.
Therefore, this method is for those who can afford to have the amount of offer tied up in the event of an interim dispute of the payment terms and for those who are desparate to have an item deleted that the CA will not agree to standard PFD agreement.
Here is an example that I have used:
COVER LETTER:
To Whom It May Concern:
In order to resolve the disputes related to account <######>, this letter and the enclosed conditionally endorsed check are an offer of accord and satisfaction for settlement in full of Account No. <########>. Deposit of the conditionally endorsed check is strictly contingent upon your acceptance to the terms and conditions of check endorsement and notices. This check is not a payment toward account, but only represents consideration and satisfaction of the offer of accord.
The enclosed conditionally endorsed check may only be deposited upon acceptance to the offer of settlement and its terms as tendered. These terms may not be amended, altered or exempted. No stamp of protest will waive these terms. The check may not be applied as any partial payment or accepted in any other manner. If you do not accept this offer and terms of settlement in full, including the deletion of all credit reporting for this account, then either destroy the check or return it to me with your notice of decline.
The enclosed check is conditionally endorsed as follows: (copy check endorsement terms/text as shown below)
(I suggest attaching a copy of a CA statement from them or a the page from your credit report showing the account)
Then make the check out as follows:
FACE OF CHECK:
PAY TO THE ORDER OF: "<NAME OF COLLECTION COMPANY> upon agreement to the terms of endorsement of this check"
MEMO LINE: "Offer of accord & satisfaction for settlement in full of Account <#xxxxxxxx>"
BACK OF CHECK: (use a statement type check like Versa Check stock and 6 point font on back to fit)
CONDITIONAL ENDORSEMENT: Pay <$###.##> to the order of <COLLECTION COMPANY> upon settlement in full and deletion of all reports by <COLLECTION COMPANY> and/or it’s affiliates against all consumer credit profiles of <YOUR NAME> for Account Number <########>, including Transunion, Experian, Equifax, CSC Credit Services or Innovis.
NOTICE TO PAYEE: This check is an offer of accord and satisfaction in order to resolve the dispute of account <########>. This check constitutes a contract and may only be accepted as tendered. Deposit of this check constitutes acceptance and obligation to the terms below. This check was remitted with a separate letter of offer which describes the conditional terms of this check. These conditional terms of payment may not be modified, amended, waived or exempted. Deposit of this check without performance to the terms shown constitutes breach of contract and deceptive trade practices under Texas Finance Code Section 392. This check may not be deposited or accepted as a partial payment. This check is not a payment toward account, but is consideration and satisfaction of this offer of accord. This offer and check constitutes settlement in full.
OFFER: <YOUR NAME>, as payor, offers <COLLECTION COMPANY> a conditional settlement in full for Account Number <########>, which offer is acknowledged by the issuance of this check.
ACCEPTANCE: <COLLECTION COMPANY>, as payee, accepts this conditional offer of settlement for Account Number <#########>, which acceptance is acknowledged by the deposit, assignment or negotiation of this check, including electronic debit or conversion, by any employee, agent or assign of <COLLECTION COMPANY>.
CONSIDERATON: In consideration of <$###.##>, represented by this conditionally endorsed check, payor and payee agree to the mutual covenants and terms contained herein.
COVENTANTS: It is agreed that this offer with issuance and acceptance of this check represents settlement in full to Account Number <########>. It is agreed that all credit bureau reporting for Account Number <########> will be deleted by <COLLECTION COMPANY> within 14 days of deposit.
TERMS: This check cannot be deposited without liability to the covenants and terms shown. It is agreed that issuance and acceptance of this check is not a stipulation or acknowledgement to any debt being valid or invalid, but represents settlement in full between parties only. The separate letter of offer remitted with this check provided binding notice to any person processing this check that it is conditionally endorsed. Lack of an endorsement signature or stamp by <COLLECTION COMPANY> does not exempt the covenants or terms herein nor provide any claim that notice of conditional payment was not provided or that this check was mistakenly deposited by automated processing. The act of deposit alone shall constitute acceptance and obligation. This check represents settlement in full for Account Number <########> which will be deleted from all credit reporting by <COLLECTION COMPANY> within 14 days. Any stamp of protest, alteration or amendment to these terms and endorsement are prohibited.
Message Edited by txjohn on 03-08-2009 03:08 PM
Message Edited by txjohn on 03-09-2009 05:47 AM
