HELP! Really need advice - old tuition bill!

Hope it's okay that i'm posting this in more than one forum, I wasn't really sure which one was more appropriate.

What is the name of your state? Mississippi

I could really use any advice..

I had an old college tuition bill that got out of hand... I withdrew from school and left them with a balance of $4,000 which has now ballooned to over $7,000 and they're unwilling to settle.

I had a lawyer friend contact the university that held the debt and the collection agency. We offered a settlement somewhere around $5000-6000. They wouldn't budge, not an inch. I'm very discouraged.

The only thing they did offer was this: I pay at least $1,000 down and payments of $100/month until the debt is paid in full (roughly $7,300). In doing this, they agree in writing to add no further interest charges to the debt. If I miss a payment, they will begin adding charges again. Yipes!

The debt was incurred in the spring of 2000. The university added $1,400 in late fees and interest charges (1.5% a month) before it was tranferred to the collection agency in March of 2002. The collection agency has added its own $1,800 in collection costs.

I know the bill is my responsibility, but $1,800 in collection costs is ridiculous, I think. For all they did - send me some statements and talk to me on the phone a handful of times.

I'm very frustrated, because I felt pretty sure they'd accept some sort of a settlement. We're thinking of appealing to the head controller of the university, but don't know that it would do any good or if we could even get an appointment with him.

The university still holds the debt, the collection agency is just contracted by them to try and get it.

The lawyer I was speaking with at first suggested Chapter 13 bankruptcy, but then said it wouldn't be a good idea since I'd end up paying the full $7,000 plus some court costs/lawyer fees (the only
other debt I have is insignificant (except a few garnishments on my check which will be paid off this month) or in good standing). I was thinking that maybe if I went thru with a bankruptcy that the judge would "throw off" some of those large interest charges/collection costs?

I know I should consult my lawyer again... but I just thought I'd ask around online first (he's answering my questions as a favor and not charging me, so I didn't want to bother him too much).

Any input, anyone?

Thanks very much!!

[djohnson]

It is probably not worth filing bankruptcy for this small amount even if you could get the interest off which is doubtful. There is really not very much you can do except take the payment arrangments they offered you. Typical charge for a collection company is 1/3 of the debt. This and the fact that you would pay collection and legal costs were probably in your original contract.

Thanks for the advice.

I saw on a website that the SOL on everything (except judgements) in my state is 3 years.

If it's 3 years, and this debt was incurred in 1999-2000, is the SOL about to be up? Or did the "clock" start over when they transferred it to the collection agency?

If the SOL runs out, could I use that as a playing card with them in trying to reach a settlement?

[djohnson]

The SOL starts with the date of last payment. If you have been making sporadic payments in this time it will start with the last one. Transferring does not reset the SOL date.

[djohnson]

Also if they get or have gotten a judgement prior to the SOL running out it will be a whole different SOL which is a lot longer and can be renewed. Threatening them with it before the SOL is out would not be any good except possibly push them to get the judgement.

Thanks DJohnson, you've been a tremendous help.

I've never made any payments on this account, so I suppose the SOL would have begun from the date the debt was considered delinquent.

I thought once the SOL passes they can't enter a judgement against me... ? Am I understanding that correctly?

I just looked at my records and the three years should be up sometime between now and August.

[djohnson]

They can still get the judgment if they haven't already until that SOL date is up. The judgment will last a lot longer if they do get that and they will probably pursue due to the amount.

[Elmo-1]

Also if this was a state university that loaned you the money you may have a gov backed student loan to which SOL's don't apply.

Thanks Elmo.

It began as a stupid loan, but when I withdrew from the college, the loan money was returned to the guarantor (sp?) and left the university "holding the bag" of the debt, so to speak.

It's a rather confusing situation. Thanks.