When dealing with a collection agency and making payment arrangement what rights does the consumer have?

Question

We have had a medical bill turned over to a collection agency in which we have a previous collection with. We have been making regular payments every month and suddenly they demanded us to pay more. They asked us to fill out a financial questionaire and then told us to pay more per month. Frankly, we have set aside a hundred dollars a week to feed our family of four and put gas in our cars to get to work which leaves us about 60 a week for food. If we agree to their terms we will have $35 a week to feed our family. Do we have any rights at all?

Answer 1

Yes, it's called the Fair Debt Collections Practices Act, and you have a right to pay what you can and when you can. First things first, you want to stop communication with them either by phone or mail. Write them a cease and desist letter (see Section 805(c) on "ceasing communication with a debt collector"). You can write something like this:

"According to my rights under the FDCPA, I am charging you to stop contacting me about this debt in any way, shape or form. This includes all phone calls and mail. In addition, our budget allows us to pay $20 a month, and that is all we can afford. We will being paying this on the 1st of every month. If you contact me about this debt again, I will make a complaint with the FTC and State Attorney General about this violation of my rights."

That's it.

Answer 2

I would need some more information. You say you have been paying them regular payments every month already? How much and how long? Did you have anything in writing where you agreed to make these payments?

If so, you have what is legally called a "volation" of the contract. You have agreed to change the previous terms, and by making several payments already you have confirmed this agreement. Most states will recognize this. Here in Michigan, if that collection agent attempted to sue you for the remainder of the loan, a judge would rule in your favor. You need to research this a bit to be your state does it this way.

Whatever you do, DO NOT send them your financial info! Especially anything relating to your bank accounts, employers, or property. They will use this once they have a judgment to garnish your wages.

In the event they do take you to court, and the volation laws are not in your favor, then the judge can order installment payments that will fit into your budget.

Answer 3

Sorry for your predicament. Collection agencies have to follow some strict rules in their business conduct and there is some regulation. Because they have an agreement with a client to collect their past due accounts does not automatically mean you are obligated to enter into any contract or agreement. Some rules are in place to eliminate various forms of harassment as like in the times they can call and where they can call to contact you (ie: like work and such or calling your relatives and using other strong arm tactics. If you think you have an overly aggressive collection agent (sometimes paid by commission), you might involve legal aid or ask him if it's okay to record your conversation on the phone so you can check on the details. It may get you more respect. State rules could vary somewhat, but I am speaking in generality. I would not be in any hurry to supply them with additional information on any form of theirs. Also watch your credit reports - collection agencies have there own section and can error.
Also, I am guessing you did not have insurance for the medical procedure. Often hospitals or providers will quickly agree to a discount and payment schedule (They face potentially getting nothing and write of thousands of dollars), the collection agency is hired by them and not the other way around and they probably have precedence.

Answer 4

If you have the name of the collection agency, google it to get the address. Send a certified, return receipt letter requesting validation of the debt to include copies of contracts or other documentation that proves the debt is yours. Give them 30 days. Actually, they are required to send you written validation within 5 days of contacting you. However, that validation is only the name of the original creditor and the amount of the debt. Don't use form letters as many are chock full of bad info and tend to be confrontational. They are likely to do more harm than good. Use your own words. If the debt is yours, be sure to get any settlement agreement in writing and do not give the collector direct access to your bank account. Also, contacting the original creditor will do you very little good. The debt has probably been sold to the collection agency and you will have to deal with them.

Answer 5

If you have 2 bills with that company now, you should absolutely pay more each month.
Have you and your husband looked into picking up part time jobs to get the extra money to pay off the bills.
Have you thought of selling stuff on ebay to make extra money?
You obviously have extras that you could do with out since you have internet service. I know for a fact if you can afford internet your family won't starve.
If you have kids and you're low income, use your tax return to pay off/ pay down the bills. If you paid 2000 of your tax return on the bill I can almost guarantee they'll help you set up a lower monthly payment.

Answer 6

They can tell you they want more but you dont have to pay it. Any money you send must be accepted and credited to your account. However, if you dont pay them what they want, they can sue you, which can lead to garnished wages or property. Just ask them if they intend to take you to court, they cant lie and say yes if they arent planning to. If they say no, just pay them what you have been, maybe a little more.