A debt settlement notice is a letter that is usually written by a debt collector and addressed to the debtor. It is created after a collections agency makes a verbal agreement with the debtor concerning an owed debt. A settlement notice is used to ensure that a debtor understands the terms for settling the debt. It also ensures that the debtor knows what the collections agency will do in return for her paying off the debt.
Why A Settlement Notice Is Needed
Verbal debt settlement agreements are often difficult to prove in a court of law. When you have a written debt settlement notice, there is a greater chance of proving your case, should the need arise. The agreement between you and the debt collector is undeniable when you have a paper trail documenting the payment terms. If you pay a debt and the debt collector refuses to uphold his end of the deal, you can consult with an attorney to hold the debt collector accountable.
What To Do
Contact the debt collector. Advise him that you desire to settle the debt, as agreed. However, you want a settlement notice to ensure accountability from the collection agency. The settlement notice should include the name of the collection agency, your account number, original debt amount, settlement agreement and the due date for settlement. The settlement notice should also include promises made by the debt collector. For instance, the creditor may agree to report the debt to credit reporting bureaus as paid in full, once your balance is paid off.
Another Option
If the debt collector still refuses to send a settlement notice, write your own. Include the debt collector's name and address, your name and address, account number, original debt amount and the agreed upon settlement. Include any promises made by the debt collector in return for your payment. Sign and date the letter. Include a signature and date field for the debt collector, so he can sign to accept the agreement. Request that the letter be mailed back to you. Send the letter to the debt collector via Certified Mail so you have proof that the collections agency received your letter.
What Not To Do
Debt collectors often agree to settle for less than the amount owed if a debtor agrees to make a lump-sum payment. If you don't receive this settlement notice in writing, think twice before paying off the debt. Until you receive the settlement notice, you have no proof of an agreement between you and the debt collector. If you make the lump-sum payment before receiving the settlement notice, the debt collector may renege on his promise to discount the debt or to report the debt as paid to credit bureaus.
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