The all-important settlement agreement
The "gag order" part of the debt settlement agreement matters as much as the payoff amount
Some people in debt are going to insist on settling a debt collection case on their own — without the help of legal counsel. If the case is a small value and impractical to add on legal fees, this makes sense. Either way, that person should keep the following tips in mind in regard to a settlement agreement.
Insist on a written settlement agreement
Some outfits will just want to take your debt collection payment over the phone and tell you that everything’s okay. It’s not okay. You want a piece of paper signed by both parties (you and the creditor or its attorney) saying that the case is over forever.
The settlement agreement should state the following:
The case number and jurisdiction of the lawsuit
The creditor (If the lawsuit is by a debt-buyer, it should identify both the debt-buyer that is suing you and the original creditor.)
The agreement should require the plaintiff/creditor to dismiss the lawsuit with prejudice immediately upon you having paid the settlement amount.
Here’s what else the settlement agreement should specify.