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Restrictive Endorsements


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Ok guy's, I need some legal jargon here. I am preparing to send a check to the infamous Unifund for two debts that are currently being reported to Equifax. Both debts are for bounced checks and total 370.00 dollars. There are two trade lines being reported, one for each check.

These two trade lines are one of the biggest things stopping me from buying my first home. The finance company gave me a conditional offer of exceptance as long as these two debts are either paid off or no longer show up on my Equifax report.

I need to know an appropiate amount to make the check out for and the verbage that I should place on the back of the check so that if they cash it part of the restrictive endorsement is that they will remove the trade lines from my credit reports. To all the great legal minds out there can ya help a fellow member out.

Now I don't know if this matters but my state is Utah.........

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OK so I know you wanna do the house thing but have you disputed these things?

I understand it might be easier to pay them and get your house but Unifund is SCUM SCUM SCUM... you don;t know what they might do to your reports or if they will tell you that you owe more than you should owe.

You only owe the face value of the check plus the bank fee the merchant charged. They cannot collect any other amount UNLESS where you wrote the check had a sign posted that said you may inquire collection costs as well.

Be careful about the whole NSF check thing....

Good luck with the house and all

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Originally these two trade lines were being reported to all three credit bureaus. I disputed with all three and TU and EX took them right off. EQ verified them so I left alone for a while until this CHOD that we are in right now.

I included the two trade lines in CHOD and they came back as verified within two weeks. I just sent off a procedural request that is up on the 31st.

I found this, can someone read it and break it down for me. Basically tell me if it is ok to use a restrictive endorsement in Utah.

70A-3-206. Restrictive indorsement.

(1) An indorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further transfer or negotiation of the instrument.

(2) An indorsement stating a condition to the right of the indorsee to receive payment does not affect the right of the indorsee to enforce the instrument. A person paying the instrument or taking it for value or collection may disregard the condition, and the rights and liabilities of that person are not affected by whether the condition has been fulfilled.

(3) If an instrument bears an indorsement described in Subsection 70A-4-201 (2), or in blank or to a particular bank using the words "for deposit," "for collection," or other words indicating a purpose of having the instrument collected by a bank for the indorser or for a particular account, the following rules apply:

(a) A person, other than a bank, who purchases the instrument when so indorsed converts the instrument unless the amount paid for the instrument is received by the indorser or applied consistently with the indorsement.

(B) A depositary bank that purchases the instrument or takes it for collection when so indorsed converts the instrument unless the amount paid by the bank with respect to the instrument is received by the indorser or applied consistently with the indorsement.

© A payor bank that is also the depositary bank or that takes the instrument for immediate payment over the counter from a person other than a collecting bank converts the instrument unless the proceeds of the instrument are received by the indorser or applied consistently with the indorsement.

(d) Except as otherwise provided in Subsection ©, a payor bank or intermediary bank may disregard the indorsement and is not liable if the proceeds of the instrument are not received by the indorser or applied consistently with the indorsement.

(4) Except for an indorsement covered by Subsection (3), if an instrument bears an indorsement using words to the effect that payment is to be made to the indorsee as agent, trustee, or other fiduciary for the benefit of the indorser or another person, the following rules apply:

(a) Unless there is notice of breach of fiduciary duty as provided in Section 70A-3-307, a person who purchases the instrument from the indorsee or takes the instrument from the indorsee for collection or payment may pay the proceeds of payment or the value given for the instrument to the indorsee without regard to whether the indorsee violates a fiduciary duty to the indorser.

(B) A subsequent transferee of the instrument or person who pays the instrument is neither given notice nor otherwise affected by the restriction in the indorsement unless the transferee or payor knows that the fiduciary dealt with the instrument or its proceeds in breach of fiduciary duty.

(5) The presence on an instrument of an indorsement to which this section applies does not prevent a purchaser of the instrument from becoming a holder in due course of the instrument unless the purchaser is a converter under Subsection (3) or has notice or knowledge of breach of fiduciary duty as stated in Subsection (4).

(6) In an action to enforce the obligation of a party to pay the instrument, the obligor has a defense if payment would violate an indorsement to which this section applies and the payment is not permitted by this section.

And

70A-3-104. Negotiable instrument.

(1) Except as provided in Subsections (3) and (4), "negotiable instrument" means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:

(a) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;

(B) is payable on demand or at a definite time; and

© does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain:

(i) an undertaking or power to give, maintain, or protect collateral to secure payment;

(ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral; or

(iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor.

(2) "Instrument" means a negotiable instrument.

(3) An order that meets all of the requirements of Subsection (1), except Subsection (1)(a), and otherwise falls within the definition of "check" in Subsection (6) is a negotiable instrument and a check.

(4) A promise or order other than a check is not an instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this chapter.

(5) An instrument is a "note" if it is a promise and is a "draft" if it is an order. If an instrument falls within the definition of both "note" and "draft," a person entitled to enforce the instrument may treat it as either.

(6) (a) "Check" means:

(i) a draft, other than a documentary draft, payable on demand and drawn on a bank;

(ii) a cashier's check or teller's check; or

(iii) a demand draft.

(B) An instrument may be a check even though it is described on its face by another term, such as "money order."

(7) "Cashier's check" means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank.

(8) "Teller's check" means a draft drawn by a bank either on another bank, or payable at or through a bank.

(9) "Traveler's check" means an instrument that:

(a) is payable on demand;

(B) is drawn on or payable at or through a bank;

© is designated by the term "traveler's check" or by a substantially similar term; and

(d) requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument.

(10) "Certificate of deposit" means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.

(11) (a) "Demand draft" means a writing not signed by a customer that is created by a

third party under the purported authority of the customer for the purpose of charging the customer's account with a bank.

(B) A demand draft:

(i) shall contain the customer's account number;

(ii) may contain any or all of the following:

(A) the customer's printed or typewritten name;

(B) a notation that the customer authorized the draft; or

© the statement "No Signature Required" or words to that effect; and

(iii) may not include a check purportedly drawn by and bearing the signature of a fiduciary, as defined in Section 70A-3-307.

70A-3-105. Issue of instrument.

(1) "Issue" means the first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of giving rights on the instrument to any person.

(2) An unissued instrument, or an unissued incomplete instrument that is completed, is binding on the maker or drawer, but nonissuance is a defense. An instrument that is conditionally issued or is issued for a special purpose is binding on the maker or drawer, but failure of the condition or special purpose to be fulfilled is a defense.

(3) "Issuer" applies to issued and unissued instruments and means a

Repealed and Re-enacted by Chapter 237, 1993 General Session

Thanks........................

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