What is conditional endorsement?

Answer 1

A conditional endorsement is where the act of cashing a check connotes acceptance of terms established by the check writer. Who hasn't written, "paid in full" on the memo line of our checks? That really isn't a conditional endorsement. To let the payee know that by cashing the check they have accepted the payor's conditions, the check writer would have to put in writing, on an attachment to the check, a statement telling the payee that by cashing the check, they agree to the terms. Conditional endorsements won't work if the contract stipulating payment prohibits their use.

Some credit repair sites on the internet suggest that conditional endorsements are a method of cleaning up your credit report. You negotiate with a creditor to change your account status to paid after they receive full or partial payment from you.

If you plan on using a conditional endorsement to get your creditors to agree to change your account status after cashing your certified check or money order, you should hire an attorney to draft the attachment. Make sure your correspondence is sent by registered mail and keep copies of all correspondence, including a copy of the cashier's check or money order.