The main issue in your question is whether the collection agent or original creditor withdraw the settlement offer before the time-limit on acceptance lapses. In general, a contract is an agreement a court will enforce. A contract is formed when there is an offer and acceptance. I can't give you legal advice. Only an attorney can do that. I can, however, give you some general information that you can use as a starting point.
When is a Contract Accepted?
Law students and lawyers will recognize one potential sub-issue in your question, which is known infamously as the mailbox rule. The mailbox rule concerns acceptance of a contract. In most jurisdictions, acceptance of a contract occurs the moment the acceptance is dispatched. There is an importance exception to the mailbox rule that concerns certain language appearing in the offer. If the offer contains something like, "This offer will be accepted when your acceptance is received by me." The mailbox rule does not apply precisely here, but I mention it to acknowledge that some of its elements fit your facts.
You mentioned the collection agent faxed an offer to you that contained language to the effect that you had seven days to respond to (which we can safely assume to mean accept or reject) the offer. You called five days later to accept the offer. You were told the offer was withdrawn. The central issue in your question is, can the offeror (the collection agent) or the original creditor withdraw the offer before the seven days expires.
In general, an acceptance is valid if the power of acceptance is still in effect. Here, the power of acceptance was in effect for seven days. You called in day five to accept. Therefore, your acceptance would have been timely.
When is a Contract Terminated?
Next we look to see how the power of acceptance can be terminated. There are five ways to terminate the power of acceptance:
- Rejection by the offeree
- Counter-offer by the offeree
- Revocation by the offeror
- Lapse of time
- Death of the offeror or offeree
Let us focus on No. 3, revocation. In general, an offeror is free to revoke an offer at any time before it is accepted. Going back the mailbox discussion above, the offeror's revocation does not become effective until it is received by the offeree. The other four ways to terminate an acceptance do not apply in this case, and are self-explanatory.
Here, you called to accept the offer. It is unclear that you uttered the phrase, "I accept the offer," before the collection agent or original creditor said, "The offer is revoked." If you accepted the offer before the customer service representative could tell you the offer was revoked, then you have a contract. If the customer service representative told you the offer was revoked first, then I do not see recourse for you. I hasten to add that I am basing my discussion on the common law, which may not apply in your state of residence for this question. Consult with an attorney in your state to learn the exact rules in your state.
If the original creditor, or any creditor for that matter, does not negotiate reasonably, then you may want to hire a debt settlement firm to do the heavy lifting for you. Visit the Bills.com Debt Savings Center to learn more.
I hope this information helps you Find. Learn & Save.