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Breach of Settlement Agreement by OC?

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Hi Everyone. I'm glad to be here on this great forum! :)++

Well, here's my bleak situation. I have significant cc debt on these 3 cards:

OC 1: $3,400

OC 2: $10,100

OC 3: $47,000

OC 2 is 120 days past due and is now with a CA (No DV here -- didn't know about DV because I hadn't discovered this forum until a few days ago). OC 3 is 180 days past due but supposedly still with the OC.

So, about 7 weeks ago I received a letter from OC 3 explaining that I was in default and that I was in danger of a lawsuit or referrral to an outside collection agency. The letter stated that this was my "final opportunity" to avoid these measures; I had 5 days to make new arrangements or they would "pursue the alternatives outlined above."

I called right away and was offered a 20% settlement. I made it known then and in every conversation since that I'm dealing based on that original letter promising that no further action by either CA or lawsuit.

Terms called for monthly payments in November and December w/ a "balloon" type payment at the end of this month. I "formally" accepted in December. I requested and received a second letter (via fax and signed hardcopy) outlining just these payment terms. This letter even noted that the November payment as "Paid" towards the settlement.

Now, instead of receiving my monthly statement from OC 3, I received what I call the "Introduction Letter" from a CA. This despite the November letter promising I would avoid collection status if I called and made a deal.

My final payment is due at the end of this month (around $9,000). I don't know if I can even make it; if I do it will be very close and leave almost nothing for anything else. If I don't settle I can probably payoff and/or settle OC 1 and OC 2 (Citi). Yet, then I face a lawsuit for the entire $47.000 on OC 3.

Bk is not an option for me for too many reasons to list here. But I have examined my state's exemption statute and I fall well under as I now have no assets of any worth - just an apartment, 20 y/o vehicle, no land, etc.

I should note that the majority of this was accumulated funding a small family business that recently failed. Now, I'm working part-time and looking hard for full-time work. I know I have to drastically increase my income.

Do I have any type of claim or rebuttal to a suit by OC 3 if I don't settle based on the original letter that promised a settlement would preclude referral to ca? Is this a "breach" of the settlement?

Can I survive a long collection battle and/or lawsuit?

Am I crazy?

Thanks so much.


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Assuming you do have it in writing, I would try my damnest to pay it off. If you fail to pay as agreed, and OC3 figures they have to go to teh mat, they will likely use the agreement to settle as an admission against interest and slam dunk you in court. If you have no income, no property and 60K in unsecured debt, I think BK is a natural. But if tha tis not an option, you have the right idea of trying to settle that biggie. Just make sure the OC is still in tune with the settlement. And if you do make the payment, get a release signed by the OC that says you are paid in full.

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