This actually happened to a friend of a friend, but I need to know the answer as I intend to settle accountes in the future.
What happened was that person A had an old debt of $10,000 with a collection agency. Person A agreed with the collection agency to pay $4,000.00 to pay off the account. Person A paid the $4,000.00.
Collection agency then turns around and sues Person A for the remaining $6,000.00. Is this even legal? If an agreement was already made on paper to settle the account for less than what is owed, then that frees Person A from being sued for the rest, correct? Please clarify this as I intened to settle debts out in the future. Thank you very much!