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Should I sign settlement stip?

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nomorecringing

Junior Member
What is the name of your state? New York

Hi all. Just for background, I'm not interested in playing armchair lawyer with the one collection agency I am dealing with. I acknowledge the debt, no prob, it's mine. And I have been making monthly payments for 4 months now.

What is bothering me is the wording of the settlement stip they are strong-arming me to sign. They are asking me to waive "any and all offsets, defenses and/or counterclaims."

If I sign the settlement (which is otherwise non-objectionable), what is to prevent them going ahead and getting a judgment even though I am paying them on time? And further, is there anything that would prevent them executing on that judgment even though I am paying on time?

I really need the payment plan so I would like to be cooperative. I am just worried that if I sign away all my legal rights there will be no stopping whatever they want to do -- unless the court is vigilant in such matters. I intend to call the court before signing this as they have been very helpful in the past.

Advice please! TYVM
 


Chien

Senior Member
I intend to call the court before signing this as they have been very helpful in the past.
While helpful, the Court is precluded from giving you legal advice.

Have you already been sued? Because, from your post, it sounds as if what you are calling a Stipulation (and they may be as well), is really a Confession of Judgment. The latter is used pre-litigation and avoids the necessity of litigation. The former is used to conclude existing litigation. It would be easier to answer your question knowing your status.

As to what would prevent them from taking and executing on a judgment, the simplified answer is adherence to the terms of the "Stipulation/Confession", but NY's statute pertaining to a CofJ is a bit more "relaxed" than the majority of states in terms of confirming a knowing waiver of due process, so knowledge of your status would be helpful.

At this point, it is sounding as if they have presented you with some Stipulation/Confession hybrid and thrown in some "legalese" for good measure.
 

nomorecringing

Junior Member
Here's the timeline

I received a consumer credit court summons in February. It was sent to me by regular mail from some anonymous process server. Later, a copy was also sent by the collection agency/law office.

I called the court about it and they advised me that when I answered, to copy the court in on the answer plus any other significant correspondence. I did that, and also began making small monthly payments.

The collection agency/law firm responded with a prior version of this payment plan. I asked for several changes and, again, copied the court. I also continued to make payments as stipulated by me and then by the plan.

Now I have received this new version, in which they did make some of the changes I asked for that were more trivial, but the parts that make me queasy are unchanged. In the cover letter the woman attorney tells me the language is "standard". She also says I have the right to renegotiate if I find myself in dire circumstances, that they just don't want me ducking the debt (which is fine with me).

If I do sign this, I will make sure to send a copy of her letter to the court. Also, if I sign it, should I be sending a copy of each month's check to the court?

I am jumpy about this because I had a horrible experience with Upton, Cohen and Slamowitz a couple of years ago. However, that time I did not know I should be sending things to the court as well as to the agency. This firm seems to be behaving better.

I would like to keep this matter from becoming a judgment on my credit report. It sounds as if, in theory at least, signing the plan and continuing to make the modest payments should accomplish that. So, should I be sending copies of all my checks to the court in case the collection/law firm tries some kind of end run later on??

For the record, the threat given if I do not sign was stated as follows:

"If you do not agree to our standard terms we will notice the matter for trial."

and later

"In the event we do not receive the signed settlement stipulation as indicated above and/or we do not receive payments pursuant to the stipulation, we will continue to pursue litigation proceedings."

I can't help but be fascinated by that "and/or", but my inner grownup tells me not to be too much of a smartypants.
 

Chien

Senior Member
That makes all the difference in the world. (This isn’t directed at you but is for posters generally: people would be surprised at how much faster they get the information they need, if they are precise in their explanations.)
When you said “collection agency”, I thought you hadn’t been sued. When you say law firm, I know you have been. Forget about a Confession of Judgment.
Also forget about sending a copy of your monthly payments to the Court. They justifiably will not know what to do with them. If there’s enough information to relate them to your case, they might throw them in the case file, but they’ll resent being bothered. For you, it’s another matter; keep a copy of the final Stipulation signed by all parties and copies of your checks. If you have no grace period for payment, send them in a manner that gives you proof of the mailing date. The Post Office can do this without the need to send them certified, but doing it that way will also give you proof of the receipt date.
That brings me to the next point. You don’t mention a grace period for curing a payment default (a late or non-payment). The waiver of “any and all offsets, defenses and/or counterclaims” is, in a sense, “boilerplate” language – it’s unnecessary for a well-drafted stipulation, which shouldn’t require more than 4-5 paragraphs, but it doesn’t hide lurking dangers, because you’re negotiating a deal. You benefit by the deal and they want the language. It’s a point I’d concede in return for a grace period, if one doesn’t exist, and assurance of a dismissal with prejudice for full and timely performance – eg.
2. Defendant will pay unto the attorney for Plaintiff the sum of $X on or before [the agreed date] and the further sum of $X on or before [same date-next month] and continuing on the same day of each month thereafter until the sum of $Y shall be paid in full.
3. Upon the default in the making of any of the foregoing payments, Plaintiff shall give written notice to Defendant, and Defendant shall have seven (7) days from the date of notice to cure said default. In the event of an uncured default, Plaintiff shall have the absolute right to have judgment entered for the full principal sum provided for herein [plus accrued interest, attorney’s fees and costs] less credit for those payments received by the attorney for Plaintiff up to the time of the uncured default.
5. Upon the making of all payments as provided in paragraph two hereof, the attorney for the Plaintiff shall cause this case to be entered as dismissed with prejudice.

Negotiate the things that are important, but also remember that, in the end, they’re in the driver’s seat. As Tom Waits says, the large print giveth and the small print taketh away.
 

nomorecringing

Junior Member
Importance of "without prejudice"

Are the words "without prejudice" important? Because they are not there. Otherwise, the language you quote is pretty much what I have before me.

They are giving me 10 days' grace on payments... actually 10 days after notification. So that's fine with me. They are asking for quite minimal monthly payments, which is what I need while I finish up some debt that's more pressing than this. Eventually I want to renegotiate a lump sum settlement with them anyway so this works fine for now.

There is an area that could bite me down the road, and that is they are not stipulating principal and interest, but rather just an aggregated sum that includes both. This opens the door for them to compound the interest if I screw up because they will treat the lump sum as principal. What it is, actually, is the original defaulted credit card from 2003 plus statutory interest for 6 years of payments. They already wiped out four years of back interest when they made the offer so I don't really want to rock the boat on this if I don't have to.

My feeling is, as long as I know what it is I don't want to quibble. I want them to accept te dinky montly payments for a year or two and not grief me. Then in year three I plan to renegotiate a lump-sum settlement and cross them off the list.

So, to summarize:

1.) Quit whining and sign & return the setlement stip.

2.) Send copy to the court (just in case they "forget") with copy of her cover letter telling me I have the right to further negotiations should I be laid off, etc.

3.) Keep copies of all checks on file.

4.) Continue my journey towards a debt-free life.

Is that good? Thanks for your insight. I feel less wary knowing it is, indeed, "standard language" she is throwing at me.
 

Chien

Senior Member
Not sure that I understand your question. My example used the term “with prejudice”, not “without prejudice”. Your reference isn’t in my example either. The former means that the same action could not be filed again; the latter allows it to be (‘tho, admittedly, it would be hard if you could prove a perfected settlement). At that point, it’s just a way of dotting “is” and crossing “ts”.
I use a 10-day grace period in my Stips. I cut it down to 7 in the example, because most creditors like it to be shorter than 10.
Look at it this way: once I put together a deal that’s acceptable to both parties, I don’t want it to fall apart. I’m not hiding in the bushes waiting for you to slip up. I want to move on to other things and (no offense) not have anything more to do with you than to get the monthly check and eventually wrap up the case. Everything you’ve said about the people you’re dealing with suggests to me that they have the same philosophy. (Geeze, they even suggested re-negotiation, if you run into problems.)
As referenced in my last post, it’s good to read the paperwork and do some critical thinking – but don’t overwork it and get paranoid about minutiae. There’s nothing that you described that suggests that this Stip is a ticking time bomb. If you perform as promised, the “legalese” won’t matter and, if you don’t, they’ll probably take judgment in spite of your best efforts to stop them. Your choice.
 

nomorecringing

Junior Member
Thanks!

You have reassured me and I will be signing and mailing the stip today.

Sorry about the misread on "with prejudice" -- a negative in the non-legal world, I just mentally translated to a positive as I was reading, didn't even notice I did that. It was interesting to find out the legal meaning.

Thanks again for your help and explanations. This is a great service!

-- nmc
 

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