Full & Final Settlement Offers - Any Advice???

[shinobi101]

6. Can someone explain or point me in the right direction for the chapter and verse about why you should send the settlement cheque via a 3rd party?

 

"Nutshells contract law" by Robert Duxbury pages 35-36. (Cost me £8.95)

 

A contract must have "consideration" - something of value offered by each party.

 

Part payment of a debt is not good enough consideration to write off the balance.

 

BUT:

 

1. Composition agreements. Where a group of creditors agree to accept a partial settlement, none of them can sue for the rest after, because allowing them to do so would amount to fraud on the other creditors.

 

2. Part-payment of the debt by a third party. They cannot sue you after accepting F&F from a third party because that would amount to fraud against the third party.

 

Hope that helps:)

[shinobi101]

Cheers for that Shinobi. Though I confess I still don't understand it!! Don't understand the fraud bit against the 3rd party.

 

Not completely sure I do in legal terms terms. Here's what I think:

 

Third party has no obligation to the creditor, but offers to settle the debt for a reduced amount.

 

If the creditor takes the third party's money as F&F and then sues you, they have dishonestly taken money from the third party.

 

Using dishonesty to make money is fraud.

 

You might get a better explanation if you copy and paste this into a new thread in the legal issues section.

[shinobi101]

It might be worth a letter to the creditor telling them you authorise your chosen third party to negotiate or act on your behalf. Don't know if it will help or not, but shouldn't do any harm.

 

The thinking behind that is to give them less to complain about.

[shinobi101]

A word of warning: although the payments were made and I have heard nothing since all four creditors did not follow up with their agreement to remove the default from the CRFs. When I complained they stated they had to reflect a true representation of the account.

 

It's surely part of the contract? Does that not put them in breach of contract? Maybe you should have included a penalty clause that they will pay you £1000 if the defaults are not removed by a specified date say 3 months after the payment date.

 

Also, on the CRFs the settlement was not marked as a full and final settlement, but as " full and final settlement, although the amount did not cover the amount owed". What can you do?

 

My thinking on this is to offer a silver coin (or anything else of value) as consideration to forgo the balance. That way, if they accept it they have accepted part payment plus "sufficient" (doesn't have to be "adequate") consideration to forgo the balance. This really is full and final.

 

one letter stating that the payment had to be paid directly by the debtor.

 

Maybe they're not so stupid after all They obviously understand the 3rd party payment rule, i.e. they can't sue for the balance.

 

These four accounts all had valid credit agreements.

 

Awesome! Well done:D