Legal Question in Credit and Debt Law in Michigan

Is it true that if you send a good faith payment to a creditor for less than the full amount owed and they return it to you because it's not for the full amount owed, that you can consider the debt forgiven because they refused a payment in good faith?

Asked on 2/16/12, 6:47 am

1 Answer from Attorneys

Thomas R. Morris Silverman & Morris, P.L.L.C.

No. If the amount was tendered was intended as payment in full, the creditor would be correct in refusing payment.

If the creditor accepts payment of less than the full amount where the amount is subject to a bona fide dispute and the payment is intended to be in full satisfaction of the debt, an "accord and satisfaction" can result. That would mean that the debt has been satisfied. In order to avoid that result, a creditor may choose to refuse the payment.

This answer is for discussion purposes only and does not constitute legal advice.

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Answered on 2/16/12, 6:53 am

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