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Meulah
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Page 136 in the "Sexy" book references a law that once a check is cashed by a creditor that is marked as the final payment... they can't come back & try to get more out of you. I live in KS. Is this correct? I wrote my own settlement letters three months ago to all of my accounts offering ten cents on the dollar to be paid off in installments. They have all cashed the checks which were marked as settlement payments & "novation" on the back. Four of them received a check marked as the final payment this last week. What IS this law referred to in the book? Number? Is this something I can, in turn, issue to the CRA's to have the accounts removed or marked as paid or something??? HELP!!! I am freaking out as to what to do next. I don't want to go back to the creditors & ask "was that OK???" Of course, they'd say NO! I didn't have an agreement in writing as far as a rep from the card signing in advance or anything. I was following the advise of a debt elimination place. All of my accounts had been written off by the original creditor... a year old.... and placed with CA's. Most of them had been sold several times. I wrote to the OC & issued my checks directly to them. I have been written to by an agency actually saying that they bought the debt & I owe THEM the money. I am writing another letter to them offering a larger settlement & apologizing for any confusion.

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If the accounts have been sold by the original creditor, they no longer have the legal capacity to enter into any type of settlement agreement with you.

First thing you should do is stop writing checks! You'll want to contact the creditors who cashed your checks and find out what happened to the money.

What you most likely have done is restart the running of the statute of limitations on your old accounts by writing your settlement letters and making payment, no matter who the payment went to.

Writing "payment in full" is commonly called a "restrictive endorsement" and is only binding under limited circumstances. Your own state statutes likely covers these types of transactions. I am not familiar with Kansas law.

An appointment with an attorney would be a wise investment for you at this juncture.

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Guest E. Normis Debtor

Kansas law recognizes an accord and satisfaction by means of a negotiable instrument. K.S.A. § 84-3-311 is the applicable statute.

In order for an accord and satisfaction to be recognized, there would have to exist a bona fide dispute as to the amount owed. You can't simply decide to settle for a lessor amount than is due.

Additionally, most agreements and billing statements provide a specific address to which disputes or disputed amounts should be sent. You'll note the Kansas statutes require that your checks be sent to such a designated address or such a payment would be exempt from being an accord and satisfaction.

There is ample case law in Kansas that a partial payment tolls the limitations period on a promissory note, or acts to revive a limitations period that had otherise expired.

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  • 2 weeks later...

On the front of the checks I issued I wrote "In full satisfaction of a disputed debt" and on the back I wrote "endorsement constitutes full payment". None of the 10 creditors have disputed that the debts are settled. The fact that they endorsed the check shows that they intended to settle the debt.

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Guest E. Normis Debtor

Kerry, There are a number of reasons why you may not currently be hearing from your creditors; the fact you attempted some kind of accord and satisfaction probably isn't one of them.

In a dispute based on a contract, a creditors relief is provided by law; it does not sound in equity. Therefore, if you were sued for breach, the court must act as a court of law rather than a court of equity.

So, unless your "accord and satisfaction" conformed to statute in both form and substance, it could not be held valid by a court of law.

Though yours may indeed conform to your state's statutory requirements, you reside in a different state than does the OP.

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If you want to try an A&S, the agreement MUST be in writing. Simply writing "paid in full" on a check won't do it:

Louisiana Civil Code article 3071 states that "[a] transaction or compromise is an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their differences by mutual consent, in the manner which they agree on, and which every one of them prefers to the hope of gaining, balanced by the danger of losing." La. Civ. Code Ann. art. 3071 (West 1994).

"Louisiana Civil Code art. 3071 has been interpreted by this court to require that a transaction or compromise, in order to be valid and enforceable, must be either reduced to writing and signed by the parties participating in the settlement or recited in open court capable of being transcribed from the record of the proceeding" Sullivan v Sullivan, LA Supreme court, No. 95-C-2122, 1995

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Guest E. Normis Debtor
I have found several Louisiana cases on point and I think I'm on sound footing.

The OP's question is specific to Kansas statutes. What's your point?

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The OP's question is specific to Kansas statutes. What's your point?

More to the point Louisiana follows some blend of Napoleonic Code (and some traditions from non-English law, like Spanish law), and one of the main differences is the non-applicability of stare decisis. Granted, it's been two years since I took legal research, but it's right there in my notes.

In other words, without stare decisis, case "law" is problematic because there is no principle of standing behind cases already decided.

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See Anesthesia East v. Barres, 594 So2d 1085. The concept of accord & satisfaction is similar to principles of novation, contained in La.Civ.Code arts. 1879 - 1887, where a new performance is substituted for one that was previously owed. The accord & satisfaction is an affirmative defense which is proven when there is an unliquidated or disputed claim between the debtor and creditor, a tender by the debtor for less than the sum claimed, and acceptance of the tender by negotiation of the check. Id.

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Completely different issue.

While the statute itself does not provide for the consequences of failure to reduce a compromise agreement to writing, this Court has previously held that a compromise which is not reduced to writing is unenforceable. Bourgeois v. Franklin, 389 So.2d 358 (La.1980); Jasmin v. Gafney, Inc., 357 So.2d 539 (La.1978). Furthermore, we agree with plaintiff that the requirement that the agreement be reduced to writing necessarily implies that the agreement be evidenced by documentation signed by both parties. Singleton v. Bunge Corp., 364 So.2d 1321 (La.App. 4th Cir.1978).

[95-2122 La. 4] As was stated in Bourgeois, supra, "La.C.C. art. 3071 is placed in the code to insure proper proof of extra-judicial agreements. Inasmuch as there is no judgment on the merits outlining the obligations each party has to the other when a case is settled by the parties, the law has seen fit to require the compromise agreement, which sets out those obligations, to be reduced to writing to serve as proof of the agreement and the acquiescence therein." Obviously, to serve as written proof of the agreement and obligations of both parties, and their acquiescence therein, the written agreement must be signed by both parties, obligating both to do what they have agreed on.

Felder, 405 So.2d at 523 (emphasis added). 5

Deals with settlement AFTER a lawsuit is filed!!!!!!!!!!!!!!!!!!!!!!

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You are dreaming. Think about that for a minute- if it were, you could buy a house, and then write that silly phrase on the check for the FIRST payment and get a nearly free house. Do you REALLY think the law works that way?
Yes, my research indicates that it does.

Kerry,that's a pretty neat concept, but I think you're reading a little too much into your research. You mentioned a critical component of accord and satisfaction in one of your earlier posts...

The accord & satisfaction is an affirmative defense which is proven when there is an unliquidated or disputed claim between the debtor and creditor

The scenario that Dive presented doesn't include the necessary component of dispute. So in that case, as Dive pointed out, the A&C claim will fail. It is similarly difficult to prove dispute in a typical debt case as well, since the amount is not always the fact in dispute. It can be the age of the debt, whom the debt is owed to, or any number of other factors. Since the A&C must take place between real parties in interest, if ownership of the debt is in question, no A&C can take place. You have likely been fortunate enough to not have been tested on any of the restrictive endorsements you have submitted to creditors, but it is not accurate to assume that what has worked for you will be universally accepted. More accurately, I think you are probably the exception to the rule with what you were able to accomplish.

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Guest E. Normis Debtor
The accord & satisfaction is an affirmative defense which is proven when there is an unliquidated or disputed claim between the debtor and creditor, a tender by the debtor for less than the sum claimed, and acceptance of the tender by negotiation of the check. Id.

Did you offer the creditor a lessor sum of money to settle the loan before submitting the check, or did you simply dispute the debt?

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You are dreaming. Think about that for a minute- if it were, you could buy a house, and then write that silly phrase on the check for the FIRST payment and get a nearly free house. Do you REALLY think the law works that way?

Not to shoot holes in your analysis, but in my case, debt is disputed as to amount; creditor is aware of dispute and accepts the check in full satisfaction of disputed debt.

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