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settling debts - which agreement is better?


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I am clearing up a LOT of cc debt. 4 credit cards have been charged off and I want to settle with the CA's. I have the how2settleyourdebt ebook, but info straight from this site looks more up-to-date. I am fairly comfortable with the letter I'm sending, but not sure on the agreement template.

thanks so much in advance for your feedback!

Which is better? (and sorry for the long post, but I have to include two agreement templates)



ABC Collections, Inc, referred to as COLLECTION AGENCY and John Q. Consumer, referred to as CONSUMER, agree to resolve the matter of the alleged debt, originally held by the ______________________ Company, hereafter referred to as the CLIENT. CONSUMER hereby agrees to settle this alleged debt claimed by COLLECTION AGENCY on the following terms and conditions:

The COLLECTION AGENCY certifies that it is legally authorized to act in behalf of its CLIENT and that any agreement that the COLLECTION AGENCY makes on behalf of CLIENT is legally binding on the CLIENT.

The COLLECTION AGENCY and the CONSUMER agree that alleged debt is $_____________.00 (_____________ & 00/100 dollars). While the CONSUMER feels that validity of the debt has not been proved by the COLLECTION AGENCY, the parties agree that the COLLECTION AGENCY shall accept the sum of $_________.00 (___________ & no/100 dollars) as full payment on the debt. The acceptance of the payment will serve as a complete discharge of all monies due, and the COLLECTION AGENCY agrees to consider the debt paid in full and agrees to not take further action to collect on the alleged debt. The payment shall be made in the form of a cashier's check or money order.

Upon payment of the $_______.00, the COLLECTION AGENCY agrees to remove any listing or information that the COLLECTION AGENCY may have placed on the CONSUMER'S credit report. The COLLECTION AGENCY agrees to never at any time in the future place any information on the CONSUMER'S credit report.

The CONSUMER feels that the negative information on CONSUMER's credit report is damaging and while the exact estimation of the damage is not currently known, the CONSUMER estimates it to be $10,000 (ten thousand dollars and zero cents. Should the COLLECTION AGENCY fail to remove the listing or reinsert it at a later date, the COLLECTION AGENCY agrees to award liquidated damages of $10,000 to CONSUMER.

This compromise is expressly conditioned upon the payment being received by . If the CONSUMER fails to pay the compromised amount by <date>, this contract will be immediately terminated.

The person signing this agreement, __________________________________, hereby declares that he/she is authorized to act as an agent of the COLLECTION AGENCY.

This Agreement shall be binding upon and inure to the benefit of the parties, their successors, and assignees.


Signature: ____________

Legal Representitive of ABC Collections, Inc.

Signature: ____________

John Q. Consumer





This contract shall serve to spell out the terms of a settlement offer between <insert your

name>, hereafter referred to as debtor and <insert credit card company’s name>, hereafter

referred to as creditor on acct number _______________________.

Upon receipt of a certified check from the debtor for $______________, the creditor agrees that

this balanced owed on acct number _______________ is zero and that no further payment or

fees are due from the debt at any time in the future.

In addition, the creditor agrees to remove any references to late payment or charge off regarding

this account from my credit file.

This contract supersedes all others between the debtor and creditor.

_______________________________________________ Date:___________


I attest that I am authorized to make decisions regarding the making and acceptance of

settlement offers for outstanding credit card for the <insert credit card company’s name>


Read, Approved and Accepted by:____________________ Date:__________


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:) I used this form and included an additonal wording "delete debt on all three credit reports" and it worked I had a two year old debt with a lousy needs to go back to dental school dentist who had broke one of my tooth and I dont think I should had to pay for her office fee she charges aside from the fact it was not posted in her office. It was deleted less than 30 days and its not showing on any of my reports.


Sign love your credit like your life


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On some levels, the first one looks better.

But I like the simplicity of the second one. It seems easier to adjust wording in the 'settlement' agreement as opposed to the 'compromise' agreement.

If the simpler one is effective, I think I will just use that.

thanks for your input!

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