The agreement should also be signed and dated by all parties. Depending on your status, you may need to have the document certified from a notarized point of view. Once the agreement has been concluded, accepted and signed by the lender and borrower, it becomes a legally binding agreement. Debt cancellation is a lot like that. When a debt is cancelled, the debtor will be fully discharged from his debts and will no longer be obliged to make any further payments. Debt cancellation agreements may vary from state to state and jurisdiction to jurisdiction. For example, the Texas State Office of Credit Commissioner (OCCC) sets contractual requirements for debt cancellation agreements made available to consumers by auto agencies. One of the most interesting requirements is the fact that the buyer has non-life insurance for the vehicle while in his possession. DcAs are generally considered an alternative to insurance. However, insurance is about the depreciation of the automobile. A debt cancellation contract (DCA) is an agreement whereby the holder of a private credit contract terminates a certain amount owed in the contract if the vehicle is stolen or added. Some DCAs require the retail buyer to maintain insurance for the vehicle. A DCA that requires a private client to maintain insurance must be submitted to our agency for verification.
The OCCC has 45 days to approve or disapprove of this type of DCA form after it has been forwarded to the Agency. As of May 5, 2016, there will be a non-refundable registration fee of $250 per DCA. It is probably in your best interest that your debt cancellation contract be written down and verified by a lawyer before signing something. To ensure that the document is legally binding, it must contain certain information (such as information that establishes a valid contract). Banks and other financial institutions offer credit withdrawal contracts instead of a credit insurance plan. Credit insurance is a type of insurance acquired by a borrower that pays off one or more existing debts in the event of death, disability or, in rare cases, unemployment. DCs act as credit insurance, but can also be written to cover the life events of the borrower`s spouse or other members of the household.