Is a debt canceled if the creditor refuses a settlement offer?











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I've been told by several people on several occasions -- in several jurisdictions within the US -- that if you owe someone money, you can offer some stupidly low amount of cash (most versions include numbers from $1 to 25%) to settle the debt. If the creditor refuses that offer (or in some versions of the claim, if they don't word their refusal just so to make it a counteroffer), then the debt goes away.



Is there any validity to these claims?










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  • I'm voting to close this question as off-topic because it's better asked on money.stackexchange.com
    – BlueDogRanch
    7 hours ago










  • I do know that when a sufficient amount of creditors agrees to a settlement, other creditors can be forced to abide by it in some jurisdictions. The percentage of debt actually repaid can be quite low, though 1$ would seem to be a bit of a stretch
    – bytepusher
    7 hours ago






  • 3




    This is a question about what the law is, and seems to me to be exactly on topic here. I oppose closing it.
    – David Siegel
    4 hours ago















up vote
2
down vote

favorite












I've been told by several people on several occasions -- in several jurisdictions within the US -- that if you owe someone money, you can offer some stupidly low amount of cash (most versions include numbers from $1 to 25%) to settle the debt. If the creditor refuses that offer (or in some versions of the claim, if they don't word their refusal just so to make it a counteroffer), then the debt goes away.



Is there any validity to these claims?










share|improve this question
























  • I'm voting to close this question as off-topic because it's better asked on money.stackexchange.com
    – BlueDogRanch
    7 hours ago










  • I do know that when a sufficient amount of creditors agrees to a settlement, other creditors can be forced to abide by it in some jurisdictions. The percentage of debt actually repaid can be quite low, though 1$ would seem to be a bit of a stretch
    – bytepusher
    7 hours ago






  • 3




    This is a question about what the law is, and seems to me to be exactly on topic here. I oppose closing it.
    – David Siegel
    4 hours ago













up vote
2
down vote

favorite









up vote
2
down vote

favorite











I've been told by several people on several occasions -- in several jurisdictions within the US -- that if you owe someone money, you can offer some stupidly low amount of cash (most versions include numbers from $1 to 25%) to settle the debt. If the creditor refuses that offer (or in some versions of the claim, if they don't word their refusal just so to make it a counteroffer), then the debt goes away.



Is there any validity to these claims?










share|improve this question















I've been told by several people on several occasions -- in several jurisdictions within the US -- that if you owe someone money, you can offer some stupidly low amount of cash (most versions include numbers from $1 to 25%) to settle the debt. If the creditor refuses that offer (or in some versions of the claim, if they don't word their refusal just so to make it a counteroffer), then the debt goes away.



Is there any validity to these claims?







united-states debt ixl






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share|improve this question








edited 3 hours ago

























asked 7 hours ago









cHao

1,640618




1,640618












  • I'm voting to close this question as off-topic because it's better asked on money.stackexchange.com
    – BlueDogRanch
    7 hours ago










  • I do know that when a sufficient amount of creditors agrees to a settlement, other creditors can be forced to abide by it in some jurisdictions. The percentage of debt actually repaid can be quite low, though 1$ would seem to be a bit of a stretch
    – bytepusher
    7 hours ago






  • 3




    This is a question about what the law is, and seems to me to be exactly on topic here. I oppose closing it.
    – David Siegel
    4 hours ago


















  • I'm voting to close this question as off-topic because it's better asked on money.stackexchange.com
    – BlueDogRanch
    7 hours ago










  • I do know that when a sufficient amount of creditors agrees to a settlement, other creditors can be forced to abide by it in some jurisdictions. The percentage of debt actually repaid can be quite low, though 1$ would seem to be a bit of a stretch
    – bytepusher
    7 hours ago






  • 3




    This is a question about what the law is, and seems to me to be exactly on topic here. I oppose closing it.
    – David Siegel
    4 hours ago
















I'm voting to close this question as off-topic because it's better asked on money.stackexchange.com
– BlueDogRanch
7 hours ago




I'm voting to close this question as off-topic because it's better asked on money.stackexchange.com
– BlueDogRanch
7 hours ago












I do know that when a sufficient amount of creditors agrees to a settlement, other creditors can be forced to abide by it in some jurisdictions. The percentage of debt actually repaid can be quite low, though 1$ would seem to be a bit of a stretch
– bytepusher
7 hours ago




I do know that when a sufficient amount of creditors agrees to a settlement, other creditors can be forced to abide by it in some jurisdictions. The percentage of debt actually repaid can be quite low, though 1$ would seem to be a bit of a stretch
– bytepusher
7 hours ago




3




3




This is a question about what the law is, and seems to me to be exactly on topic here. I oppose closing it.
– David Siegel
4 hours ago




This is a question about what the law is, and seems to me to be exactly on topic here. I oppose closing it.
– David Siegel
4 hours ago










2 Answers
2






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5
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Is there any validity to these claims?




No, except maybe in bankruptcy proceedings that involve additional circumstances/factors.



A loan is a contract. What you describe is simply a debtor's attempt to replace the contract he incurred with a creditor. As such, the creditor is entitled to decline the settlement offer, thereby leaving the initial contract (in this case, the original conditions of the loan) in force.



Generally speaking, declining a new proposal does not invalidate the contract that would have been replaced if the offeree were to accept such proposal.






share|improve this answer






























    up vote
    2
    down vote













    No



    If you owe someone money then you must pay them the full amount, subject to a binding agreement that you can pay less.



    "I know I owe you $100, how about I pay $5?", "No." - is not an agreement, let alone a binding one. In fact, "I know I owe you $100, how about I pay $5?", "Give me the $5.", money changes hands, "Now, give me the remaining $95." is a demand that would be upheld by the court - part payment of a debt is not satisfaction of that debt.



    Even if the creditor agrees to take less, there must be a something of value offered by the debtor. Agreeing to pay it now (or by next Thursday etc.) rather than forcing the creditor to take the debtor to court is something of value - in such circumstances if the creditor agrees then there is a binding contract that if the debtor does what they promised the creditor will accept a lesser amount.



    A possible source of confusion is that if a creditor is offered full satisfaction of the debt in legal tender (and the contract does not restrict this) and they refuse then the debt is discharged.






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      2 Answers
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      2 Answers
      2






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      up vote
      5
      down vote














      Is there any validity to these claims?




      No, except maybe in bankruptcy proceedings that involve additional circumstances/factors.



      A loan is a contract. What you describe is simply a debtor's attempt to replace the contract he incurred with a creditor. As such, the creditor is entitled to decline the settlement offer, thereby leaving the initial contract (in this case, the original conditions of the loan) in force.



      Generally speaking, declining a new proposal does not invalidate the contract that would have been replaced if the offeree were to accept such proposal.






      share|improve this answer



























        up vote
        5
        down vote














        Is there any validity to these claims?




        No, except maybe in bankruptcy proceedings that involve additional circumstances/factors.



        A loan is a contract. What you describe is simply a debtor's attempt to replace the contract he incurred with a creditor. As such, the creditor is entitled to decline the settlement offer, thereby leaving the initial contract (in this case, the original conditions of the loan) in force.



        Generally speaking, declining a new proposal does not invalidate the contract that would have been replaced if the offeree were to accept such proposal.






        share|improve this answer

























          up vote
          5
          down vote










          up vote
          5
          down vote










          Is there any validity to these claims?




          No, except maybe in bankruptcy proceedings that involve additional circumstances/factors.



          A loan is a contract. What you describe is simply a debtor's attempt to replace the contract he incurred with a creditor. As such, the creditor is entitled to decline the settlement offer, thereby leaving the initial contract (in this case, the original conditions of the loan) in force.



          Generally speaking, declining a new proposal does not invalidate the contract that would have been replaced if the offeree were to accept such proposal.






          share|improve this answer















          Is there any validity to these claims?




          No, except maybe in bankruptcy proceedings that involve additional circumstances/factors.



          A loan is a contract. What you describe is simply a debtor's attempt to replace the contract he incurred with a creditor. As such, the creditor is entitled to decline the settlement offer, thereby leaving the initial contract (in this case, the original conditions of the loan) in force.



          Generally speaking, declining a new proposal does not invalidate the contract that would have been replaced if the offeree were to accept such proposal.







          share|improve this answer














          share|improve this answer



          share|improve this answer








          edited 6 hours ago

























          answered 7 hours ago









          Iñaki Viggers

          5,3071517




          5,3071517






















              up vote
              2
              down vote













              No



              If you owe someone money then you must pay them the full amount, subject to a binding agreement that you can pay less.



              "I know I owe you $100, how about I pay $5?", "No." - is not an agreement, let alone a binding one. In fact, "I know I owe you $100, how about I pay $5?", "Give me the $5.", money changes hands, "Now, give me the remaining $95." is a demand that would be upheld by the court - part payment of a debt is not satisfaction of that debt.



              Even if the creditor agrees to take less, there must be a something of value offered by the debtor. Agreeing to pay it now (or by next Thursday etc.) rather than forcing the creditor to take the debtor to court is something of value - in such circumstances if the creditor agrees then there is a binding contract that if the debtor does what they promised the creditor will accept a lesser amount.



              A possible source of confusion is that if a creditor is offered full satisfaction of the debt in legal tender (and the contract does not restrict this) and they refuse then the debt is discharged.






              share|improve this answer

























                up vote
                2
                down vote













                No



                If you owe someone money then you must pay them the full amount, subject to a binding agreement that you can pay less.



                "I know I owe you $100, how about I pay $5?", "No." - is not an agreement, let alone a binding one. In fact, "I know I owe you $100, how about I pay $5?", "Give me the $5.", money changes hands, "Now, give me the remaining $95." is a demand that would be upheld by the court - part payment of a debt is not satisfaction of that debt.



                Even if the creditor agrees to take less, there must be a something of value offered by the debtor. Agreeing to pay it now (or by next Thursday etc.) rather than forcing the creditor to take the debtor to court is something of value - in such circumstances if the creditor agrees then there is a binding contract that if the debtor does what they promised the creditor will accept a lesser amount.



                A possible source of confusion is that if a creditor is offered full satisfaction of the debt in legal tender (and the contract does not restrict this) and they refuse then the debt is discharged.






                share|improve this answer























                  up vote
                  2
                  down vote










                  up vote
                  2
                  down vote









                  No



                  If you owe someone money then you must pay them the full amount, subject to a binding agreement that you can pay less.



                  "I know I owe you $100, how about I pay $5?", "No." - is not an agreement, let alone a binding one. In fact, "I know I owe you $100, how about I pay $5?", "Give me the $5.", money changes hands, "Now, give me the remaining $95." is a demand that would be upheld by the court - part payment of a debt is not satisfaction of that debt.



                  Even if the creditor agrees to take less, there must be a something of value offered by the debtor. Agreeing to pay it now (or by next Thursday etc.) rather than forcing the creditor to take the debtor to court is something of value - in such circumstances if the creditor agrees then there is a binding contract that if the debtor does what they promised the creditor will accept a lesser amount.



                  A possible source of confusion is that if a creditor is offered full satisfaction of the debt in legal tender (and the contract does not restrict this) and they refuse then the debt is discharged.






                  share|improve this answer












                  No



                  If you owe someone money then you must pay them the full amount, subject to a binding agreement that you can pay less.



                  "I know I owe you $100, how about I pay $5?", "No." - is not an agreement, let alone a binding one. In fact, "I know I owe you $100, how about I pay $5?", "Give me the $5.", money changes hands, "Now, give me the remaining $95." is a demand that would be upheld by the court - part payment of a debt is not satisfaction of that debt.



                  Even if the creditor agrees to take less, there must be a something of value offered by the debtor. Agreeing to pay it now (or by next Thursday etc.) rather than forcing the creditor to take the debtor to court is something of value - in such circumstances if the creditor agrees then there is a binding contract that if the debtor does what they promised the creditor will accept a lesser amount.



                  A possible source of confusion is that if a creditor is offered full satisfaction of the debt in legal tender (and the contract does not restrict this) and they refuse then the debt is discharged.







                  share|improve this answer












                  share|improve this answer



                  share|improve this answer










                  answered 3 hours ago









                  Dale M

                  49.5k22870




                  49.5k22870






























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