Late last year I entered into a settlement agreement with Ch--e, whereby I would remit payment of 51% of my balance and they in turn would not seek reimbursement of the remaining balance, but instead report it to the IRS as earned income. All payments were to be direct withdrawal from my bank account with my full authorization. I was to repay $4500.00 within 30 days, with the first payment totaling $2800.00 due November 3rd, 2006. The second payment of $1700.00 was due two weeks later. The first payment was made as scheduled. However, when the second payment was coming due I did not have the funds available, so I contacted Ch--e to notify them that instead I would split this payment into two separate payments of $850.00, one to be made that same day and the last payment two weeks following. Both payments were authorized by myself at the time of this phone call with Ch--e. The first payment of $850.00 was withdrawn from my account as authorized. However the second payment was not withdrawn as agreed, whereby this would have concluded the terms and conditions of the agreement. Unfortunately, I was not aware that this payment had not been withdrawn from my account. This was my fault, however the payments had been arranged and authorized by myself.

During the initial arrangement of the settlement the person informed me not to pay attention to the next coming statements as they would not reflect the agreement made between Ch--e and myself, but that they would send a letter to me notifying me that they had informed the IRS sometime in late January or early February of 2007. I was expecting this letter to include in my tax records, however when I received the February statement I noticed that the balance was still present and in fact had been increased substantially due to the current interest rate of 29.99%. I promptly contacted Ch--e to investigate what happened as I had thought that all had been resolved. Many discussions evolved thereafter and Ch--e informed me that they would review the case and if they had not withdrawn the payment as authorized and agreed, then they would honor the agreement as planned.

I contacted Ch--e on multiple occasions to inquire as to the status of this review, however no one could inform me what that status was. Most recently they informed me that it was my fault and that I had broken the agreement to pay the original amounts set up and therefore the original settlement was dissolved. All they were interested in now was when I intended to pay the balance accrued since then.

I informed them that as Ch--e had agreed to split the payment and withdraw the first payment of $850.00 and thereafter the second payment of the same amount, that this constituted a verbal change to the contract agreement previously made. In fact, since Ch--e did follow through and withdraw the first installment of $850.00, this constituted an acceptance of this verbal change.

Last week I was informed by letter that Ch--e is now proceeding to commence with legal action against me for the entire balance owed, approximately $6,000.00, plus appropriate interest and court costs.

I have always informed Ch--e that I am still willing to honor my portion of the agreement and remit payment of the last installment of $850.00, however they have not listened to my pleas or requests for an amiable solution.

What can I do?

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Originally Posted by matthew47

Late last year I entered into a settlement agreement with Ch--e, whereby I would remit payment of 51% of my balance and they in turn would not seek reimbursement of the remaining balance, but instead report it to the IRS as earned income. All payments were to be direct withdrawal from my bank account with my full authorization. I was to repay $4500.00 within 30 days, with the first payment totaling $2800.00 due November 3rd, 2006. The second payment of $1700.00 was due two weeks later. The first payment was made as scheduled. However, when the second payment was coming due I did not have the funds available, so I contacted Ch--e to notify them that instead I would split this payment into two separate payments of $850.00, one to be made that same day and the last payment two weeks following. Both payments were authorized by myself at the time of this phone call with Ch--e. The first payment of $850.00 was withdrawn from my account as authorized. However the second payment was not withdrawn as agreed, whereby this would have concluded the terms and conditions of the agreement. Unfortunately, I was not aware that this payment had not been withdrawn from my account. This was my fault, however the payments had been arranged and authorized by myself.

During the initial arrangement of the settlement the person informed me not to pay attention to the next coming statements as they would not reflect the agreement made between Ch--e and myself, but that they would send a letter to me notifying me that they had informed the IRS sometime in late January or early February of 2007. I was expecting this letter to include in my tax records, however when I received the February statement I noticed that the balance was still present and in fact had been increased substantially due to the current interest rate of 29.99%. I promptly contacted Ch--e to investigate what happened as I had thought that all had been resolved. Many discussions evolved thereafter and Ch--e informed me that they would review the case and if they had not withdrawn the payment as authorized and agreed, then they would honor the agreement as planned.

I contacted Ch--e on multiple occasions to inquire as to the status of this review, however no one could inform me what that status was. Most recently they informed me that it was my fault and that I had broken the agreement to pay the original amounts set up and therefore the original settlement was dissolved. All they were interested in now was when I intended to pay the balance accrued since then.

I informed them that as Ch--e had agreed to split the payment and withdraw the first payment of $850.00 and thereafter the second payment of the same amount, that this constituted a verbal change to the contract agreement previously made. In fact, since Ch--e did follow through and withdraw the first installment of $850.00, this constituted an acceptance of this verbal change.

Last week I was informed by letter that Ch--e is now proceeding to commence with legal action against me for the entire balance owed, approximately $6,000.00, plus appropriate interest and court costs.

I have always informed Ch--e that I am still willing to honor my portion of the agreement and remit payment of the last installment of $850.00, however they have not listened to my pleas or requests for an amiable solution.

What can I do?

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Find out if your phone call setting up the two automatic withdrawals was taped, as this is often done. Next contact your local legal aid get legal advice as it differs in different states. Make sure all communication between you and Ch--e are documented as to time of call and who you spoke with in what location and in what department, along with the specifics of the conversations.

They said that they do not have recordings that far back, and that the notes do not reflect the second payment setup. The last person with whom I spoke to stated that since I changed the payment structure the first payment of $850, was considered a regular payment and that changing the payment structure voided the settlement. I remember that the settlement was considered valid for 30 days if paid in full within the 30 days, so I am sure that she is wrong. I am keeping records of who and when I talked to but only since recently.

I think that you may need to have local representation if this matter proceeds to court. Good Job for keeping track of conversations, unfortunately sometimes when dealing with a large company individual situations are not given consideration over "general policy". You may be looking at going to court. Make sure you show up to defend your side no matter what they suggest. I have heard companies tell defendants that they do not need to show up unless they are contesting the validity of the original debt. Of course this is in their best interest for you not to show up as they will automatically win by default. Please talk locally to a lawyer or legal aid service to see how they can help you.

If I go to court can I countersue them for my court costs, i.e. attorney fees? As well as any other fees that I incur? Should I retian an attorney or can (should) I represent myself? Our money is obviously non-existent living form paycheck to paycheck.

As far as countersuing, I am not sure so I will not attempt to answer that question. As far as hiring a lawyer, you should contact your legal aid service in your area and see if they have someone who will help you for little or no cost. They are really your next step. You should be able to look them up in your phone book under the "guide to services" section (usually a blue section of pages)

We live in a very secluded part of the country of NY, no free legal help here. I forgot to mention that recently they offered to reduce the balance owed by 1st 10%, then 15%, then again to 35%, which amounted to $3800. I declined as we do not have this kind of money just sitting around, I did counter offer for $1500, which they obviously declined. I am prepared to offer $2500 as my last offer, based upon no culpability, but this would be my last offer.

It's good that you still have a line of communication open with them. Settling may be the only option you have without incurring costly legal fees. Try to think of it as a financially costly lesson learned that now you know you will never repeat.

Well, it seems to me that YOU had the responsibility of making sure the money went to Chase. So when you noticed that they had not taken the final $850, why did you not contact your bank and have the money SENT?

You keep saying "they didn't withdraw, they didn't withdraw..." but did you SEND?

Also, if Chase didn't approve the change in advance, and if you didn't make sure the money was sent, then you are indeed in default and they can try to get all of what you owe.

Sorry.

Thank you for your response, however that is not how it works. They would've just kept taking the money and applied it towards the balance owed instead of honoring their comittment.

Since your response, my efforts have been rewarded. I repetetively tried to contact an upper level manager, not the one level above the persons who answer the phone, but one level higher than their manager. I finally got through and explained the situation to this person, albeit to their answering machine and behold they returned my call and stated that they reviewed the case and the error was on their part, not mine as you have suggested, and that if I paid the $850, then they would remove the case from litigation and honor the original agreement.

So alas all is well and over with. The point is to reach ever higher to someone who has authority and common sense. Had I taken your advice, I feel that I would probably still be dealing with this whole mess. Krittengirl is correct, keep the lines of communication open.
:)