Lawyer says debt settlement letter is an error.

What type of debt is this??? If it is a secured loan like a house or car, it couldnt hold water, especially with a prom note. However if this was a credit card payment arrngement, it would stick. I have seen it happen "in error" at the agency I worked at.

And it is not a debt settlement letter. It is a payment arrangement letter.

"Are they bound to the terms of their own letter?"

In general, the rule in California is that if an offer has been timely accepted, you've got a deal, i.e., a binding contract, enforceable in court. Even the terms of a secured note can be altered: there's no rule AFAIK that forbids it in California. The debt remains secured of course by the collateral you pledged (car, house, widget collection, whatever), but the payment terms have changed.

The trick is, there are lots of things that can complicate your particular situation. For example:

1. Is the offer clear in its terms, and did you accept those terms as proposed? If not, your acceptance might be seen as a counter-offer, which extinguishes the original offer. I doubt this is the case though, if they sent a second and confirming letter.

2. Did you timely accept the offer? Sounds like you did but good to check the offer letter for any deadlines. If there's no deadline, then you had a "reasonable time" to accept, the meaning of which can obviously vary.

3. Is there evidence of a bona fide mistake, such as a typo? I mean, if they meant to say $1,000 and omitted a zero, I doubt you'd be successful in enforcing the deal. But if you can show that this is what they bargained for, they can't back out now.

If you post more details, I'll help as best I can. Of course, always best to see a lawyer, especially with this much dough at stake.

Good luck to you.

i noticed that you said that you were trying to avoid foreclosure. if the 20k debt is a 2nd mortgage or line of credit that is in 2nd lein position on your house then most likely they will not forclose. usually the only lein that forcloses is the 1st mortgage because that is the bigger mortgage

utjw4's note doesn't even begin to explain how lien priorities work or the conditions under which a secured creditor might foreclose in California.

However, that's par for the course in here.

FYI, 2nd mortgages large and small are foreclosed all the time, especially these days.