If the creditor has approved a settlement agreement with the debtor, that agreement should be reduced to writing. See section 4.13 in this chapter.
Presuit Letter Agreement
[Date]
[Name and address of debtor]
Re: [name of creditor], Creditor
[include if applicable: Account number [number]]
[other information describing debt, e.g., Past-due balance due [name of creditor] in the
amount of $[amount], plus attorney’s fees]
Our file number: [law office file number]
[Salutation]
This letter confirms our agreement to satisfy the balance remaining due to [name of creditor] for [nature of debt] (the “Account”), as follows:
1.The balance of the Account is $[amount], plus attorney’s fees in the amount of $[amount], plus interest at the rate of [percent] percent per year from [date of agreement] (the “Debt”) (this agreement is intended to satisfy the past-due outstanding Account and does not create an additional obligation in favor of [name of creditor]).
2.[Name of debtor] agrees to pay the amount of $[amount] on or before [date] and a similar amount on the [first/last/fifteenth] day of each month thereafter through [date], when the entire remaining balance of the Debt shall be paid in full. All payments, in cash or certified checks, are to be received by [name of creditor] by the due date in care of [name of attorney/name of creditor], [address, city, state].
3.As long as [name of debtor] strictly abides by this letter agreement and timely makes the payments as scheduled herein to [name of creditor], [name of creditor] will not attempt any further collection efforts. But should [name of debtor] default in any payment as herein agreed by the parties, [name of creditor], without further notice of default, notice of intent to accelerate, and notice of acceleration, may accelerate the full balance remaining due and immediately pursue any and all legal methods to collect the balance due, plus additional attorney’s fees and court costs.
4.In exchange for [name of creditor]’s willingness to permit [name of debtor] to pay the Debt in installments, [name of debtor] agrees to toll the running of any applicable statute of limitations for any cause of action accruing to [name of creditor] that has not otherwise already expired before the date of this agreement. This tolling agreement will be in effect for ninety days from the date the final payment is due under this agreement. At the end of the tolled period, any existing statute of limitations period that had not already expired before the date of this agreement will recommence.
If these terms are acceptable, please sign and date below and return this letter to me.
Sincerely yours,
[Name of attorney]
APPROVED AND AGREED TO
AS TO FORM AND SUBSTANCE:
[Name of debtor]
Date: