I had a debt of $6,000 to a collection agency. Initially, $4,000 was what they said they'd settle for from me. I had setup a payment plan with them- that I would pay them $300 per month with postdated checks. This month, I was not going to be able to pay them that because I had other unforseeable expenses. So I put a stop payment on their check at my bank. Because of this, now the collection agency is saying that now I owe them $6,000 as opposed to the $4,000 that we had agreed upon. Is this legal for them to do? Also, how likely do you think it is that they will sue me for this?
2006-11-16 03:49:42 · 6 answers · asked by Anonymous in Business & Finance ➔ Credit
Yes its legal because you didn't honor the terms of the 'agreement'. You agreed to pay $4,000 in X amount of months but skipping a month (or stopping payment on a check) does give the creditor the right to say you forfeited the agreement and then demand you pay the full amount.
You probably should have called them prior to stopping payment to express your financial situation for the month and see if they'd be willing to work with you.
As far as suing you - before it gets to that point try contacting the agency and request the opportunity at a another payment plan. But if possible avoid doing post-dated checks. If you can't get around that, find out if you can lower the payments to an amount you will definitely be able to handle. But if you cannot come to an agreeable term of repayment then yes the company can and probably will sue you. If they don't sue you they will sell it to another agency who can exercise the sue option. You cannot run from the debt so try to work with this company as much as possible. There is a statue of limitation on how long a company has to sue you for the debt. I'd like to say 3 or 4 years...but check the Fair Credit Reporting Act to find out for certain.
2006-11-16 03:57:50 · answer #1 · answered by The First Lady 5 · 0⤊ 0⤋
The settlement is normally a courtesy so that they can get the debt off their books for their client. So, the one time you can't pay them, the deal you made with them usually goes sour and they return to the original amount owed. Settlements with companies (i.e credit card companies or auto loans) are usually valid for about 30 days or so, and with a monthly payment plan; they saw that your original company couldn't get you to honor the payment plan (for whatever reasons), so the moment you canceled your check ( without telling them??) - thats when they don't play around anymore and say the offer is null and void. That is legal. Your best bet is to stay in contact with these people, plead for another payment plan so they won't sue you....
2006-11-16 04:19:53 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Yes, it is legal. They allowed for a 'settlement" which you agreed to. Had you paid each month as promised you would have upheld your contractual agreement. However because you broke the 'contract' to settle, you've forfeited your rights.
Call and try talking to someone else at hte agency and negotiating. Collection agencys buy debt for much less than the face value-- they probably didnt' have any where near $4K in the debt so they're making a profit at THAT price.
2006-11-16 03:53:25 · answer #3 · answered by Anonymous · 0⤊ 0⤋
you breached your agreement by stopping the payment. they are holding you liable for the full amount now. did you sign any paperwork for the settlement amount? is there any provisions stating that the full amount will become due or that you confess judgment to it should you fail to pay the settlement amount?
6K is worth suing for, so yes, you shouldn't be surprised if you are served with a summons and complaint.
2006-11-16 03:55:24 · answer #4 · answered by a.lane 1 · 0⤊ 0⤋
they do no longer would desire to make any bargains with you. except you have the money on your palms which you will deliver them, do no longer tell them you pays them something. in case you do get your tax return funds quicker or later, call them and have a look at to make a cope with them. How previous is this debt nonetheless? additionally, next time you attempt to get a cope with them, have them deliver it to you in writing first earlier agreeing to it. in any different case, they are able to declare they have not have been given any theory what you're speaking approximately and have a look at to pass after the different element you theory they have been forgiving.
2016-10-15 15:21:46 · answer #5 · answered by herrick 4 · 0⤊ 0⤋
Communicate with them asap and renegotiate an agreement
because if you don't they may place a judgement on you and garnish your wages. From experience I know this-
2006-11-16 04:07:03 · answer #6 · answered by Utopia 4 · 0⤊ 0⤋