When paying off collections accounts you need to be careful when sending in less money than what you owe to satisfy a debt. A creditor may come back later and want to get more money out of you. You need to get a release for the deficiency of the debt owed. You do not want a creditor coming back later to try and collect more money from you.

If You Settle A Debt For Less Than What You Owe Get A Release

The sample letter below will give you protection against a creditor coming back to you and asking for more money. The other tip is to add verbiage to back of the check that you are going to send that states that by the creditor endorsing the check that they are acknowledging that the debt is paid in full. Be sure to put the account number on the back of the check as well. If for whatever reason the creditor never gets a signed copy back to you, you have evidence that you have paid off the debt. The canceled check is now a release of the debt owed. It is a binding legal document that you can use to prove that you paid off the debt.

If the debt still shows on your credit report, all you need to do is to send a copy of the check to the credit bureau and they will have to remove it from your credit report.

Sample Letter Of A Release Of An Old Debt, copy and paste in into a Word Document.

Date: ______________

_______________________________

_______________________________

_______________________________

Attn: Customer Service

Name(s) on account: ____________________

Account #: _______________________

To Whom It May Concern:

Enclosed is a check for $___________ to pay the balance of the account. Cashing this check constitutes payment in full of the debt.

Regards,

________________________________________

Signature

Name: ____________________

Address: ____________________

____________________

Home phone#: ____________________

Email address: ____________________

This article is of general interest and is not considered legal advice.  Should you require legal advice please seek the services of a qualified professional or attorney.  California has different rules for releases.  Please do not use this form for California.