Why you should not send payment on a settlement after the due date

The due date on the Settlement Letter is a critical part of the contract between you and the creditor. You must make sure that your payment arrives at the creditor’s office on or before the due date on your letter.  If payment is sent late, it is likely that the creditor will consider the settlement void and will just apply your settlement funds directly to the principle balance and you will still be responsible for paying the amount left on the balance.  You do not want this to happen so take some caution before sending payment on a settlement. 

If the due date on the Settlement Letter has passed or is very close and you have not sent the creditor your payment yet, it is best to not send the money.  In this case, you should call the creditor and request that they send you a new settlement letter with a later due date.  Explain to the creditor that you cannot send them funds after the due date or that it is just too close between now and the due date to send funds.  Most creditors will understand this and issue you a new settlement letter. 

If the creditor will not send you a new letter with a new due date, it is best to skip this settlement for now.  A collector may tell you verbally that they will accept the settlement even after the due date, but you need this in writing to protect yourself.