Q: Can I get sued again if I accept this debt settlement offer?
The debt settlement letter states "this letter will confirm acceptance on behalf of the above referenced current creditor the sum of [dollar amount] as settlement of the subject account" (where dollar amount is the agreed to amount and is less than the full amount owed) and then goes on to state "please make sure remittance is marked as settled and not payment in full". I am being sued and this is their settlement offer. Is it advisable to accept this verbiage? I do not wish to be sued a second time after paying this agreed amount. I am just concerned as it does not state settled in full or paid in full. I'm not concerned with tax implications or credit reporting, just that I do not get sued again. Is this safe to accept in that regard?
A: Sounds like it. The "settled" verbiage they are requesting actually protects them in a way; it acknowledges that you haven't paid the full amount owed, so they can properly tax you on the difference by sending you a 1099, which will effectively be income to you. Back in the day, there was concern that a person could write a check for any amount and write in the memo "paid in full"; if the recipient cashed it, they were agreeing that they were paid in full. There are numerous reasons why that doesn't hold anymore, but the concern is still there. But by you remitting the requested amount in the letter, you are agreeing to the settlement, which would prohibit you from being sued again for the same debt.
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