What does this statement mean in a debt settlement letter?

[stjones2023]

What is the name of your state? Arizona.

We have a debt settlement offer from the company. The letter does outline the amount we are to pay "in full satisfaction of the amounts outstanding under the contract". However it also includes this statement below (what does this statement mean?):

"the parties agree that all other terms contained in the original contract shall survive and are incorporated into this agreement."

Thank you in advance for your help!

 

[Zigner]

In general, such a statement would mean that, other than the payment arrangements previously mentioned, all other terms of the original contract will remain in force and are to be considered to be a part of the agreement. Of course, without having fully reviewed the original contract and your new agreement, there's no way anyone can advise with any certainty. Any such review would require an attorney.

 

[zddoodah]

what does this statement mean?

It means exactly what it says. The significance of the statement is impossible to explain without context.

 

[LdiJ]

What is the name of your state? Arizona.

We have a debt settlement offer from the company. The letter does outline the amount we are to pay "in full satisfaction of the amounts outstanding under the contract". However it also includes this statement below (what does this statement mean?):

"the parties agree that all other terms contained in the original contract shall survive and are incorporated into this agreement."

Thank you in advance for your help!

Ok, as an example only, lets say that you have a contract that says:

X will jump up and down on one foot for one hour.
Y will jump up and down on one foot for one hour.
X and Y will both run two miles.

You do a settlement that says that X and Y do not have to run the two miles, but also has that same statement in it. That means that while X and Y do not have to run the two miles, they still have to each jump up and down on one foot for one hour.

In other words, they don't have to do the one thing that the settlement agrees that they do not have to do, but they still have to do everything else the original contract said that they had to do.

 

[Litigator22]

Ok, as an example only, lets say that you have a contract that says:

X will jump up and down on one foot for one hour.
Y will jump up and down on one foot for one hour.
X and Y will both run two miles.

You do a settlement that says that X and Y do not have to run the two miles, but also has that same statement in it. That means that while X and Y do not have to run the two miles, they still have to each jump up and down on one foot for one hour.

In other words, they don't have to do the one thing that the settlement agrees that they do not have to do, but they still have to do everything else the original contract said that they had to do.

Thankfully your aerobic parable didn't start with the beginning of the alphabet.

 

[stjones2023]

Thank you all for your responses. I guess ultimately what my question is will the settlement amount fully satisfy the debt? Or will the company still be able to attempt to collect on the debt that they are supposed to be forgiving?

The settlement letter specifically states the following:

(Name) ("Customer(s)") and xxxx Finance LLC ("xxxx" and together with the
Customer(s), the "Parties"), hereby enter into this General Release and Settlement Agreement
("Agreement") as a full and final compromise and settlement of all amounts due and owing to
Xxxx under a Retail Installment Contract (the Contract") executed by the Customer(s) for the
purchase of a 2016 Dodge/Grand Carava (the "Vehicle") on
05/17/2017, which, upon assignment to xxxx, was ascribed an account number ending in the last
four digits: xxxx (the "Account"). This Agreement shall be deemed fully executed and effective
when it has been signed by all of the Parties (the "'Effective Date").

WHEREAS, the Customer(s) has not made a payment on the Contract since 12/10/2022
and is in default under the terms of the Contract;
WHEREAS, as of the date of this Agreement, the current outstanding balance owed to
Exeter under the terms of the Contract is $10,000; and
WHEREAS, the Parties have reached an agreement on the terms of a settlement and
repayment for the amounts due and owing on the Contract and the terms of the settlement are
contained within this Settlement and Release Agreement (the Agreement")

I. CONSIDERATION
In consideration of the mutual covenants set forth herein and for other good and valuable
consideration, the adequacy, sufficiency and receipt of which is hereby acknowledged, the Parties
agree as follows:

A. Actions Reguired of Both Parties & Settlement Terms.
i. Total Settlement Payment Amount Due to xxxx: $995.00; and

ii. Settlement Payment Terms: The Customer(s) will pay to xxxx $995.00 in
certified funds (the "Settlement Payment) on or before xxxx in full satisfaction of
the amounts outstanding under the Contract to the following address or to any other address
as subsequently designated by xxxxx

iii. The Parties agree that except as expressly provided in this Agreement, all other
terms contained within the original Contract, including without limitation those relating to
Xxxx's security interest in and lien on the Vehicle, shall survive and are incorporated by
reference into the terms of this Agreement.

B. Additional Actions Required of Customer.
i. Customer(s) agrees that within ten (10) business days of receipt of this
Agreement, Customer(s) will deliver to xxxx an original, executed copy of this
Agreement to the above address; and

ii.
Customer(s) will comply with the Settlement Payment Terms set forth above and
all other Contract terms that are not impacted by this Agreement.

 

[quincy]

Thank you all for your responses. I guess ultimately what my question is will the settlement amount fully satisfy the debt? Or will the company still be able to attempt to collect on the debt that they are supposed to be forgiving?

The settlement letter specifically states the following:

(Name) ("Customer(s)") and xxxx Finance LLC ("xxxx" and together with the
Customer(s), the "Parties"), hereby enter into this General Release and Settlement Agreement
("Agreement") as a full and final compromise and settlement of all amounts due and owing to
Xxxx under a Retail Installment Contract (the Contract") executed by the Customer(s) for the
purchase of a 2016 Dodge/Grand Carava (the "Vehicle") on
05/17/2017, which, upon assignment to xxxx, was ascribed an account number ending in the last
four digits: xxxx (the "Account"). This Agreement shall be deemed fully executed and effective
when it has been signed by all of the Parties (the "'Effective Date").

WHEREAS, the Customer(s) has not made a payment on the Contract since 12/10/2022
and is in default under the terms of the Contract;
WHEREAS, as of the date of this Agreement, the current outstanding balance owed to
Exeter under the terms of the Contract is $10,000; and
WHEREAS, the Parties have reached an agreement on the terms of a settlement and
repayment for the amounts due and owing on the Contract and the terms of the settlement are
contained within this Settlement and Release Agreement (the Agreement")

I. CONSIDERATION
In consideration of the mutual covenants set forth herein and for other good and valuable
consideration, the adequacy, sufficiency and receipt of which is hereby acknowledged, the Parties
agree as follows:

A. Actions Reguired of Both Parties & Settlement Terms.
i. Total Settlement Payment Amount Due to xxxx: $995.00; and

ii. Settlement Payment Terms: The Customer(s) will pay to xxxx $995.00 in
certified funds (the "Settlement Payment) on or before xxxx in full satisfaction of
the amounts outstanding under the Contract to the following address or to any other address
as subsequently designated by xxxxx

iii. The Parties agree that except as expressly provided in this Agreement, all other
terms contained within the original Contract, including without limitation those relating to
Xxxx's security interest in and lien on the Vehicle, shall survive and are incorporated by
reference into the terms of this Agreement.

B. Additional Actions Required of Customer.
i. Customer(s) agrees that within ten (10) business days of receipt of this
Agreement, Customer(s) will deliver to xxxx an original, executed copy of this
Agreement to the above address; and

ii.
Customer(s) will comply with the Settlement Payment Terms set forth above and
all other Contract terms that are not impacted by this Agreement.

We cannot do contract analyses on this forum. Sorry. For that you will need an attorney licensed to practice in your area who can personally review in their entirety both the original contract and the settlement agreement.

I will point out, though, that in section A (iii) of the agreement, it states the company retains its interest in and lien on the vehicle.

And I will say that I doubt that a company would agree to settle a $10,000 debt for $995. I think the $995 probably only covers the amounts past due on the loan.

Were you threatened with repossession of the vehicle?

 

[stjones2023]

We voluntarily turned over the vehicle and it has been sold. There was still a substantial amount owing even after the sale. The company has stated that the settlement will fully satisfy what is owed. I just want to clarify the other part that appears contradictory. I'm fine if they retain their interest and lien on the vehicle. We don't have it and don't want it back.

Also, it doesn't surprise me that they are willing to accept such a small amount. They've certainly recouped much more than what they lent out over the life of the loan.

 

[Taxing Matters]

I don't have the full settlement to read, and the parts that I haven't seen may make a difference. What I note here is that the settlement part that you did provide never explicitly says what portion of the loan is regarded as being satisfied in exchange for the $995.

The lender may have recovered an amount that exceeds the original sales price. But in the finance world time has value, in this case the lender is providing value to you by allowing you to pay it off under an installment and what the lender gets for giving you that time is interest. Not receiving the full interest owed means the company's investment in that loan contract underperformed, a loss that the lender would, of course, prefer to not have to take on its books if it can avoid it.

 

[stjones2023]

I don't have the full settlement to read, and the parts that I haven't seen may make a difference. What I note here is that the settlement part that you did provide never explicitly says what portion of the loan is regarded as being satisfied in exchange for the $995.

The lender may have recovered an amount that exceeds the original sales price. But in the finance world time has value, in this case the lender is providing value to you by allowing you to pay it off under an installment and what the lender gets for giving you that time is interest. Not receiving the full interest owed means the company's investment in that loan contract underperformed, a loss that the lender would, of course, prefer to not have to take on its books if it can avoid it.

It does state under A. ii the following: "
in full satisfaction of
the amounts outstanding"

And above that under the Whereas statements it states: "the current outstanding balance owed to
Xxxx(company name) under the terms of the Contract is $10,000; "

 

[adjusterjack]

full and final compromise and settlement of all amounts due and owing

Being familiar with settlement releases for insurance claims, that tells me that you won't owe anything further after paying the $995.

However, that should not be construed as "contract analysis." If you don't understand the agreement, take it to a lawyer for an explanation.

 

[quincy]

It does state under A. ii the following: "
in full satisfaction of
the amounts outstanding"

And above that under the Whereas statements it states: "the current outstanding balance owed to
Xxxx(company name) under the terms of the Contract is $10,000; "

We voluntarily turned over the vehicle and it has been sold. There was still a substantial amount owing even after the sale. The company has stated that the settlement will fully satisfy what is owed. I just want to clarify the other part that appears contradictory. I'm fine if they retain their interest and lien on the vehicle. We don't have it and don't want it back.

Also, it doesn't surprise me that they are willing to accept such a small amount. They've certainly recouped much more than what they lent out over the life of the loan.

So, you were sued by the lien holder to recover the amount still owing on the loan after your default on the loan, and the surrender of the vehicle and the settlement is how the company is hoping to end the matter rather than getting a judgment against you in court?

Bottom line is: If you want to understand what exactly the settlement agreement means to you, you will need a personal review by an attorney in your area.

 

[Litigator22]

We cannot do contract analyses on this forum. Sorry. For that you will need an attorney licensed to practice in your area who can personally review in their entirety both the original contract and the settlement agreement.

I will point out, though, that in section A (iii) of the agreement, it states the company retains its interest in and lien on the vehicle.

And I will say that I doubt that a company would agree to settle a $10,000 debt for $995. I think the $995 probably only covers the amounts past due on the loan.

Were you threatened with repossession of the vehicle?

What contract, Q? A contract this mindless garble isn't!

A contract is an agreement between parties creating mutual obligations that are enforceable by law.

When the parties attempt to make a contract where promises are exchanged as the consideration, the promises must be mutual in obligation. Without mutuality of obligation, the agreement lacks consideration and no enforceable contract has been created.

For a contract to be legally enforceable, there must be “mutuality of obligation”. This means that both parties must meet their obligations, and consideration represents the commitment the parties make to each other. Example: Shortell v. Evans-Fergusun Corp., 98 Cal App 650, 660-662, etcetera's.

So, where in this discordant mass of purported legalese is there even a hint of "Exeter Finance" incurring any obligation or commitment whatsoever?

Also, notable (if we take as granted OP's narrative of past events) it would appear that "Exeter Finance" exercised its default remedies by repossessing the Dodge vehicle and disposing of it in a reasonable commercial manner. Thus, essentially any money remaining due and owing Exeter Finance would be the loan balance at the time of the repo less what Exeter received by means of disposing of the vehicle. In other words, Exeter's legal position would be of one seeking a deficiency judgment. (The obvious assumption being that OP was upside down so far as the loan being adequately secured.)

Yet nowhere in this "Settlement Letter" is there any reference to Exeter having pursed its default remedies; or the results of exercising its legal remedies; or any efforts or intent on the part of Exeter in seeking a deficiency judgment; OR, importantly Exeter waiving its right to pursue a deficiency judgment against the OP in exchange for his promises therein.

By extrapolating I suppose one could fairly surmise that the figure of $995 as mentioned in the Settlement Letter represents the substance of a deficiency balance. However, in contrast we find this in the body the Letter:

"WHEREAS, as of the date of this Agreement, (post the repo) the current outstanding balance owed to Exeter under the terms of the Contract is $10,000."

How can this document be interpreted to the effect that the OP's payment to Exeter of $995 shall be "in full payment of the amounts due under the contract" (OP's words) when the document recites that the balance due Exeter is $10,000?

This substantive ambiguity and lack of certainly, notwithstanding the absence of mutuality of obligation, alone repudiates any legal significance to the writing. I judge would "86" it on his own motion.

If the OP wants to pay a lawyer to tell him much the same, that is his prerogative. But my suggestion is that he return the document unsigned and request in return a letter from Exeter confirming the true and acceptable amount owed and agreeing to waive its right to seek a deficiency judgment upon payment thereof.

 

[quincy]

What contract, Q? A contract this mindless garble isn't!

A contract is an agreement between parties creating mutual obligations that are enforceable by law.

When the parties attempt to make a contract where promises are exchanged as the consideration, the promises must be mutual in obligation. Without mutuality of obligation, the agreement lacks consideration and no enforceable contract has been created.

For a contract to be legally enforceable, there must be “mutuality of obligation”. This means that both parties must meet their obligations, and consideration represents the commitment the parties make to each other. Example: Shortell v. Evans-Fergusun Corp., 98 Cal App 650, 660-662, etcetera's.

So, where in this discordant mass of purported legalese is there even a hint of "Exeter Finance" incurring any obligation or commitment whatsoever?

Also, notable (if we take as granted OP's narrative of past events) it would appear that "Exeter Finance" exercised its default remedies by repossessing the Dodge vehicle and disposing of it in a reasonable commercial manner. Thus, essentially any money remaining due and owing Exeter Finance would be the loan balance at the time of the repo less what Exeter received by means of disposing of the vehicle. In other words, Exeter's legal position would be of one seeking a deficiency judgment. (The obvious assumption being that OP was upside down so far as the loan being adequately secured.)

Yet nowhere in this "Settlement Letter" is there any reference to Exeter having pursed its default remedies; or the results of exercising its legal remedies; or any efforts or intent on the part of Exeter in seeking a deficiency judgment; OR, importantly Exeter waiving its right to pursue a deficiency judgment against the OP in exchange for his promises therein.

By extrapolating I suppose one could fairly surmise that the figure of $995 as mentioned in the Settlement Letter represents the substance of a deficiency balance. However, in contrast we find this in the body the Letter:

"WHEREAS, as of the date of this Agreement, (post the repo) the current outstanding balance owed to Exeter under the terms of the Contract is $10,000."

How can this document be interpreted to the effect that the OP's payment to Exeter of $995 shall be "in full payment of the amounts due under the contract" (OP's words) when the document recites that the balance due Exeter is $10,000?

This substantive ambiguity and lack of certainly, notwithstanding the absence of mutuality of obligation, alone repudiates any legal significance to the writing. I judge would "86" it on his own motion.

If the OP wants to pay a lawyer to tell him much the same, that is his prerogative. But my suggestion is that he return the document unsigned and request in return a letter from Exeter confirming the true and acceptable amount owed and agreeing to waive its right to seek a deficiency judgment upon payment thereof.

You make some good points but I think we are lacking too many facts to advise stjones do anything but have an attorney in his area personally review the original contract (and its payment history) and the settlement agreement.