Credit Cards-didnt know where to post this??

[ErikaNB]

Recently, after asking a friend who is a lawyer, I tried to offer a settlement to my credit card accounts to pay them off.

I HAD excellent credit and but became 3 months behind. Before my credit was shot, I received a loan from my credit union to pay off just over half on each account (2)

I wrote a letter that said it was a PROPOSAL, along with the check stapled to it, and said if they didn't want to settle for this amount to send it back. I even in included a self addressed stamped envelope. On the back of the check, I wrote that if it was cashed they agreed to the terms set forth in the letter (which was to accept the payment in full and report it as such)

I wrote in BOLD letters.....THIS IS NOT O BE USED AS ONLY A PAYMENT.

I sent them out ATTN to a Senior Account Manager by certified mail.

I haven't received anything in the mail yet, but after calling the 800#'s for the accounts, it sounds like they used it as payment!!!!! Don't they have some legal responsibility to use that money for what it was intended for???? I was told that if a legal check has stipulations attached to it, it must be used for the purpose intended?? I know that I would be held responsible if I misused funds from a bank!!

Please let me know my legal rights and if I was mislead and now owe the companies AND my credit union or if they have misused the funds, what I should do now!!

Thank you

 

[Jeter]

Let me give you a simple scenario:

You loan a friend $1,000. You don't see or hear from that friend for 3 months. Suddenly you get a check from your friend for $550 with a note attached that says "ErikaNB thanks for the loan. This is what I'm paying you back for the $1,000 you lent me. EITHER ACCEPT IT AS PAYMENT IN FULL, OR SEND IT BACK AND ACCEPT NOTHING!" What would you do (besides curse them out)?


You accepted their credit cards by signing a creditor agreement (remember that?) which states you are liable to pay back all funds that you use on those cards, plus interest. Then you charged more than you could pay back. Now you want to hold THEM liable because they won't accept a little over 50% of THEIR MONEY as a payment in full, AND falsely report a PIF to the credit reporting agencies? Not likely.

Now you owe money to 2 credit cards plus the credit union.



Jeter

 

[ErikaNB]

Jeter

Well, as for your comment, I am HAPPY to report I did find out there are laws attached to a check....especially one that was bank issued and the stipulations clearly stated!!!

I do not owe the credit union AND the credit card companies!

People settle their accounts all the time and the credit card comapny must repot it as settled!!! At least I didnt go through with the Chap.7 and not owe up to any of the debt!

 

[Jeter]

Your stipulation as written on your first question was :

"(which was to accept the payment in full and report it as such) "


then you went on to say:


People settle their accounts all the time and the credit card comapny must repot it as settled!!!

You need to make up your mind because you are talking about apples and oranges. A SETTLEMENT is not the same as a paid in full. It is not reported the same and it will not appear on your credit the same. A settlement is better than a chapter 7 but is never equal to a paid in full.

People do settle accounts by paying partial amounts of the full balance. However, they settle upon terms set by the credit card company, not amounts randomly selected by the debtor. If that were the case, people would send bank checks for $10 and sue the credit card company if they don't settle under their terms.

It's nice to see you are so happy that you didn't just try to claim chapter 7 and pay nothing. Pay what you owe and stop trying to scam the credit agencies into reporting that you pay your debt in full when it's clear that you don't.
In 3 months you'll be back crying the blues because some collector is calling you a deadbeat.

By the way, the second key from the left of your right shift button has a form of punctuation that is widely used to end a sentence. Try it. Unless what you have to say is just that dramatic!!!!!!!!!!!!!!!!!!!!!!!!!

Jeter

 

[ErikaNB]

OK, whatever, didnt want to start a tennis match. Get on your soap box on another post Mr.Do-Right.

 

[JETX]

<snip>
On the back of the check, I wrote that if it was cashed they agreed to the terms set forth in the letter (which was to accept the payment in full and report it as such)

I wrote in BOLD letters.....THIS IS NOT O BE USED AS ONLY A PAYMENT.
</b><snip><b>

Please let me know my legal rights and if I was mislead and now owe the companies AND my credit union or if they have misused the funds, what I should do now!!

Thank you

What you are doing is called "Conditional Endorsement" or "Restrictive Endorsement". And regretfully, the answer to your questions can ONLY be determined by checking YOUR state laws (and the state where the check was deposited).

Some states provide that when the creditor (endorser) deposits a check with "Paid in Full" on the back, he has accepted that payment and the debt is closed. However, other states allow the creditor to mark through the line or even to void the endorsement without affecting the debts status. Finally, other states require that you provide prior notice to the creditor that you are sending a payment with "conditional endorsement"

However, the law on this is not absolutely clear. And one BIG problem for you is that you wrote something entirely different on the checks. You said, "THIS IS NOT O BE USED AS ONLY A PAYMENT." (sic), and not "Paid in full". This would further cloud your issue.

Here are some links to sites that discuss this issue:
http://www.nolo.com/auntie/question_119.html
http://www.bankrate.com/ndaq/news/drdon/dr.don_20000531.asp
http://www.abbott-abbott.com/Firm_Profile/test_your_knowledge.html
http://www.creditinfocenter.com/forms/sampleletter3.shtml

 

[ErikaNB]

Thank you for your intellegent response.

On the back of the check I actully wrote that they agreed to the terms in the attached letter... which was to accept it as a settled payment.

I wasnt all that clear on my first post because I was upset.

I did notify both credit card companies that I was sending a poposal. One to to a specific person, the other I was told to mark attn: Settlement Dept or Senior Account Manager.

I will check the laws in Virginia and the laws where the checks were sent

Thank You

 

[JETX]

I understand that you included a letter with your check, but the creditor can simply claim that when received your correspondence goes to one department and the payments (in order to process them quickly for customers!) goes elsewhere.

That is why it is so important to put your entire 'restrictive endorsement' on the check. Further, the creditor can claim that your attempt to alter the contract with endorsement was not accepted by a person with the corporate authority to amend or modify contracts. As you can see, there are a multiple of possible defenses that they can argue. That is why you don't want to 'reinvent the wheel' by trying to blaze new paths in the existing legal basis.

And now comes the bigger problem that is inherent anytime someone decides to try to be 'creative' with payments to a corporation...

Time to test your ability to defend yourself (with or without an attorney) to what is very probably going to be a long and costly battle (both in correspondence and possible court) against attorneys being paid from 'deep pockets'. Be assured, they have far more assets (and desire) than the normal person.

And how is your resolve (and ability) on this issue??

 

[ErikaNB]

I have sent you a private email if you dont mind responding?

Thank You

 

[JETX]

Done.