Once You Have an Agreement

Before you leave the collection agency’s office (or get off the phone, if you couldn’t negotiate in person), get everything you’ve agreed upon in writing. If you are negotiating by phone, have a fax number ready before you call, so you can get the agreement faxed over immediately.

As soon as you’ve reached an agreement and gotten it in writing, you will need to pay the agreed-upon amount. Usually, you can either return with the funds or overnight the money.

Do not give the collection agency a personal check. Pay off the settlement with a cashier’s check or a money order, and do not purchase it at your own bank.

You do not want the collector—and potentially any other creditors to whom you owe money—to know your bank account number.

Also, be sure to keep a copy of the cashier’s check or money order. You want to have proof that you have paid this debt.

If you have negotiated a settlement for less than the full amount owed, you also will want to make a special notation on your check. It should say something like:

Cashing this check constitutes payment in full on account number XXX-XXX-XXX.

In most states, creditors cannot come after you for the balance of the debt if they have cashed a check that is so labeled.

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