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Selling house. How to negotiate with creditors.


softwareguy
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So, I've got three liens on my house (from credit cards).  My house is up for sale and I'm starting to get some offers.

 

Questions:

 

1) When negotiating with these creditors and assuming they agree to a lower payoff amount, how do I protect myself and ensure that is the amount they provide Escrow as the payoff amount?

 

2) What sort of form(s) would I use to prove that they accepted a certain amount as payoff, to protect against them later trying to possibly say there is still a balance due?  I don't trust these guys very much, so I want to protect myself as much as possible.

 

3) How do I ensure that they remove the lien on the title so I can sell the house?

 

I'm a little fuzzy on this process and want to get into the negotiations on the right foot.

 

Any advice would be appreciated.

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1) When negotiating with these creditors and assuming they agree to a lower payoff amount, how do I protect myself and ensure that is the amount they provide Escrow as the payoff amount?

 

They are NOT going to agree to a lower payoff.  That is the very reason for the lien(s).  They have all the leverage:  you cannot sell or refinance until you satisfy the liens.  There is absolutely NO way they are going to agree to remove the liens without full payment and no title insurance company is going to clear the house for sale with one lien let alone 3.

 

2) What sort of form(s) would I use to prove that they accepted a certain amount as payoff, to protect against them later trying to possibly say there is still a balance due?  I don't trust these guys very much, so I want to protect myself as much as possible.

 

You would need a signed settlement agreement with the signature of someone from the creditor and/or their law firm with the authority to agree to the settlement and a release of lien.

 

3) How do I ensure that they remove the lien on the title so I can sell the house?

 

You get a release of lien.

 

You can certainly try to negotiate with them but getting a settlement amount lower than the judgment is not going to happen with an asset with equity like a house.

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