Signing bonus repayment terms

[clacasse]

I received a signing bonus from my previous employer. The offer letter stated that if I willfully terminated employment before 2 years that I would repay the bonus in full. There were no terms for repayment laid out in the offer other than that it would be repaid in full. The day after my last day, I received a letter demanding repayment of the bonus by the end of the month. I called to negotiate more reasonable terms for repayment-- a monthly payment plan over 6 months.

The employer is demanding that I repay the entire amount by the 12/31 (two months after my last day) or they will take legal action. Do they have the legal right to demand the money on their terms? The exact wording in the offer letter is as follows:

"You will receive a signing bonus in the amount of $X will be paid on or about July 15. If within two years of your start date you voluntarily terminate your employment, you will reimburse the Company the full amount of the payment."

I have expressed to them that I am willing to pay them but can't afford to repay the entire amount by the date they are expecting. If they do take legal action, would a judge enforce their repayment terms or would new ones be decided?

 

[Patricia_Young]

Since repayment terms are not specified in the agreement, I don't see how a judge could determine that immediate payment is required. But if the judge gets up on the wrong side of the bed that morning, who knows? It will take a while to get to hearing stage.

 

[clacasse]

Thanks for your response. A follow up question: If they are threatening legal action, is it best to wait until their is a judgement before paying anything to them? If I don't pay immediately and wait for a judgement but they never take this to court, is this eligible for debt collections with the potential to affect my credit?

 

[Patricia_Young]

If it doesn't go to court, there isn't a judgment. But yes, if they choose to report it to the big three credit bureaus, it could show on your credit report, rightly or wrongly. They could also sell the debt to a collection agency.

My suggestion is to submit, in writing, repayment terms you can live with and start paying with those terms ASAP. Shows good faith on your part (and bad faith on theirs). Keep excellent records of your payments.

 

[clacasse]

Patricia, thank you very much for your advice. I am sending the first repayment with a letter expressing my intent to repay and the terms with which I will repay the full amount. Hopefully they will take the good faith on my part and decide not to resort to any unnecessary measures. I really don't see how taking me to court will get them the money any faster, it will just end up costing them more money.