Legal Question in Credit and Debt Law in New Jersey

Re: Paying off a debt

The best way to settle a claim is through a formal agreement of settlement and release. If there is a lot of money involved you should do that. You will probably need a lawyer to draw up the form because there are some provisions that are important but will not be obvious to you.

If the amount is not large but you still want to guard against nasty surprises. Ask the collection company for a written statement from the creditor (not the collection company) as to the full amount that is due and claimed. You can then pay that amount together with a written statement and an annotation on the check that it is full payment for the claim. That is not as good as a formal settlement, but will make your work easier in court if the dispute continues.

Many collection companies will offer a form of release if you ask. It is still a good idea to have your lawyer look it over and use caution that whoever signs the form has authority to act for the creditor.

See also: http://info.corbettlaw.net/lawguru.htm