The Situation – Our office has just reached a settlement with the Plaintiff creditor on your behalf. We send you information pertaining to the settlement – either how to make your payments on the agreement or details of the release of claims by all parties.
The Question – How do I know the creditor won't refile the lawsuit against me and will honor the agreement?
This scenario and question is one that I encounter fairly regularly in our practice, and I want to take the opportunity to provide you with information (and reassurance) about the security of any settlement you may reach during the course of litigation.
There are two matters to keep in mind about settlement:
- The parties are agreeing that this resolution is in each of their best interests – one way or another. Perhaps the risk of losing at trial is too great, or the cost of continuing litigation is not worth it compared to the amount of the debt. It may be that the agreement is the best payment arrangement keeps payments manageable for you. Whatever the reason, both parties have come to the table and decided against further litigation.
- A settlement agreement is a legally enforceable document. Both parties (or their authorized representatives) approve and sign the agreement. It is a binding document. Even if the case is dismissed, a party who fails to fulfill their side of the bargain can find themselves in hot water. If a defendant fails to make their payments on a payment agreement, the creditor is entitled to enforce the settlement agreement by asking the court for a default judgment. If the creditor fails to enter a dismissal after payment is made, or sells the debt to anyone else after they settle, they are opening the door to their own set of legal woes (that our office would pursue on our client's behalf).
How do you know they won't double back? Frankly, you cannot know for certain. However, although it is only a piece of paper or electronic file, your settlement agreement is both a shield and a sword to protect you against the creditor. When it is well negotiated and well written, a settlement agreement shields you from further liability if you abide by its terms, and it is a powerful weapon against the creditor who chooses to ignore their word.
In my practice, I have almost never seen a creditor regularly disregard settlement agreements. While sometimes a creditor needs a reminder about a credit reporting issue, we have found that the issue is easily resolved. However, should a creditor dig their heels in, a Motion to Enforce Settlement Agreement or a lawsuit for Breach of Contract may be in order. If the matter pertains to your credit report, you may be entitled to compensation through the Fair Credit Reporting Act.
The debt defense attorneys at Holland Law Group represent clients throughout Florida and specialize in negotiating and reviewing settlement documentation to ensure your rights are secured. Whether a credit card dispute in Florida Panhandle, a motor vehicle deficiency in Tampa Bay, or a loan default in Miami Beach, reach out to Holland Law Group to protect your financial future.