NRS 104.3206 Restrictive endorsement.
1. An endorsement limiting payment to a particular person or otherwise
prohibiting further transfer or negotiation of the instrument is not
effective to prevent further transfer or negotiation of the instrument.
2. An endorsement stating a condition to
the right of the endorsee to receive payment does not affect the right of
the endorsee to enforce the instrument. A person paying the instrument or
taking it for value or collection may disregard the condition, and the
rights and liabilities of that person are not affected by whether the
condition has been fulfilled.
3. If an instrument bears an endorsement
described in subsection 2 of NRS 104.4201 or in blank or to a particular
bank using the words “for deposit,” “for collection,” or other words
indicating a purpose of having the instrument collected by a bank for the
endorser or for a particular account, the following rules apply:
(a) A person, other than a bank, who
purchases the instrument when so endorsed converts the instrument unless the
amount paid for the instrument is received by the endorser or applied
consistently with the endorsement.
(b) A depositary bank that purchases the
instrument or takes it for collection when so endorsed converts the
instrument unless the amount paid by the bank with respect to the instrument
is received by the endorser or applied consistently with the endorsement.
(c) A payor bank that is also the
depositary bank or that takes the instrument for immediate payment over the
counter from a person other than a collecting bank converts the instrument
unless the proceeds of the instrument are received by the endorser or
applied consistently with the endorsement.
(d) Except as otherwise provided in
paragraph (c), a payor bank or intermediary bank may disregard the
endorsement and is not liable if the proceeds of the instrument are not
received by the endorser or applied consistently with the endorsement.
4. Except for an endorsement covered by
subsection 3, if an instrument bears an endorsement using words to the
effect that payment is to be made to the endorsee as agent, trustee or other
fiduciary for the benefit of the endorser or another person, the following
rules apply:
(a) Unless there is notice of breach of
fiduciary duty as provided in NRS 104.3307, a person who purchases the
instrument from the endorsee or takes the instrument from the endorsee for
collection or payment may pay the proceeds of payment or the value given for
the instrument to the endorsee without regard to whether the endorsee
violates a fiduciary duty to the endorser.
(b) A subsequent transferee of the
instrument or person who pays the instrument is neither given notice nor
otherwise affected by the restriction in the endorsement unless the
transferee or payor knows that the fiduciary dealt with the instrument or
its proceeds in breach of fiduciary duty.
5. The presence of an instrument of an
endorsement to which this section applies does not prevent a purchaser of
the instrument from becoming a holder in due course of the instrument unless
the purchaser is a converter under subsection 3 or has notice or knowledge
of breach of fiduciary duty as stated in subsection 4.
6. In an action to enforce the
obligation of a party to pay the instrument, the obligor has a defense if
payment would violate an endorsement to which this section applies and the
payment is not permitted by this section.
(Added to NRS by 1965, 823; A 1993,
1269)—(Substituted in revision for NRS 104.3205)
Points to remember:
You should always push for
a Paid as Agreed Rating. Your final goal in negotiating your credit rating
is to get the creditor to list your credit rating after the settlement as
"Paid as Agreed" or "Account Closed - Paid as Agreed". Anything other than
this listing will have a negative effect on your credit report. Creditors
make their profits by collecting from their customers, not by reporting
negative credit information. Because creditors realize this, they will often
agree to delete any negative listing upon settlement of the debt. You have
to realize that creditors won't try to ruin your credit rating as a personal
vendetta. It's strictly business. If it pays to collect from you and restore
your rating to perfect, they will do this. Talk to them in terms of money,
not principals or morals. Something along the line of "I know you would love
to receive the $3,000 I owe you, but it will not help my credit report if
you can't change my rating to 'Paid as Agreed'. All I have is $3000 and I
will pay it to other creditors who will agree to change my credit rating in
writing."
Collection agencies will
always agree more readily to delete the negative listing than banks or
credit cards. Why? They can change their rating, no problem, but you are
still probably stuck with the original creditor reporting you late. And who
cares if you have a "Paid As Agreed" collection account: no matter what the
rating, every collection account is a negative mark. It's no skin off their
nose to change it, and of no use to your credit. You need to get the
collection agency to agree to remove their listing entirely from your report
and have the original creditor change the rating to "Paid As Agreed". At the
very minimum, you are within your legal rights to demand the removal of the
collection account from your report.
Some collection agencies will
tell you they have no power over what the original creditor will do
regarding your credit. To some extent, this is true. However, both the
collection agency and the creditor want their money. If collection agency
gets paid, so does the creditor, therefore it is to their advantage to
cooperate. And baloney if they tell you they don't know how to get a hold of
the original creditor: did the account magically appear on the collector's
desk? No. The collection agency was hired. Explain to the collection agency
if they can get a written agreement from the creditor, you will pay them
their money, or you will pay a more cooperative creditor with the only money
you have left, and they get nothing.
Remember, though, not all
collections result from credit cards. Doctor's bills cannot appear on your
report. But collections resulting from these accounts can. In the case of
such collections, there is no duplicate negative listing, since the original
creditor is not allowed to put a listing on your account, so this collection
may legally remain on your report. Many creditors, though, have an agreement
with the credit bureaus that they will not allow a negative listing to be
deleted upon settlement. While this is true, the creditor can just tell the
credit bureau that they reported your rating inaccurately, not that it was
due to settlement. Anything a creditor reports, a creditor can change. If
this wasn't the case, creditors couldn't change erroneous information they
may have placed on your account by mistake, and find themselves in trouble
with the FTC.
In most credit organizations,
there are dozens of people with the authority to make changes on the credit
report. Larger creditors, such as huge credit cards or banks will require
more pressure before they will agree to delete a negative listing, but
virtually every creditor will acquiesce with the right amount of persuasion.
If you have to accept an
imperfect credit listing as part of your settlement. You may find that some
of your creditors are willing to hold out longer than you are before
agreeing to delete the negative listing from your file. It may seem that
they are unwilling to delete the negative listing under any circumstance.
Once again, let it be said that every creditor will eventually give you what
you want if you speak to the right person, are patient and persistent, and
make the right offer. But if you are on a time-line, and your attorney can't
get them to agree to full deletion, you have a couple of other options:
List the account as
"Paid" only. You may counter-offer that the creditor list the account as
"Paid" rather than delete it altogether. This is a true indication of the
status of the account and many creditors will concede and agree to this
wording. A "Paid" status is still very negative for a collection account or
an account that will show "Paid Charge-off" or "Paid Repossession." You
should insist that the account show "Paid" only and that all other negative
notations (such as "Charge-off," "Repossession," late notations, or
"Collection") are deleted at the same time. A simple "Paid" notation on a
regular trade line is neutral and should not hurt your credit.
List the account as
"Settled" only. You may counteroffer that the creditor simply list the
account as "Settled" rather than delete it altogether. "Settled" is an
inherently negative listing but not as negative as "Paid Charge-off." Don't
agree to a "Settled" listing until you have exhausted all other
possibilities. "Settled" will still trigger a credit denial. You should only
agree that the account show "Settled" if all other negative notations (such
as "Charge-off", "Repossession", late notations, and "Collection") are
deleted at the same time. If you agree to a "Settled" notation, you must
continue to work hard to delete the notation through the credit bureau
dispute process.
List the account as
"Paid Charge-off" or "Paid Collection" or "Paid was 30-, 60-, or 90-days
late." This will be the creditor's first choice, and
your last choice, of what to place on your credit report once you have paid.
These notations are almost as damaging as showing the same debt unpaid. It
is very common, though, for an account to be deleted (through credit bureau
disputes) once it has been paid. The creditor now has no compelling reason
to keep the negative listing on your report. For this reason, it is still
usually a good idea to settle even if the creditor won't budge on deleting
or positively modifying the negative listing.
You will most likely be
able to find proof that the debt is unverifiable and not have to pay it at
all
