Question on Amount Owed

[awl2005]

What is the name of your state? IN

Received a call from a collection agency stating that my account had been turned over to them from Sears. I was late on two payments but made the payments. The account has a balance of $2000.

The collection agency woman told me that I would have to pay this in full in 10 days or it would be turned over to an attorney and I would owe $5000.

I told her that there was no way I could pay the full amount in 10 days. Would they accept payments? She said no and was very snippy and rude with me.

My question is: Can my balance jump to $5000 just by turning it over to a lawyer for collection? I understand court costs and fees but isn't that excessive? My interest rate would actually be lower under a court order than what I am paying the credit card company, correct?

Thanks.

[debtcollector`]

Originally Posted by awl2005

Received a call from a collection agency stating that my account had been turned over to them from Sears. I was late on two payments but made the payments. The account has a balance of $2000.

Your credit agreement should outline the procedures used when accounts are not not paid in a timely manner. It seems a liitle quick to me, but I am not familiar with your payment history with Sears.

Originally Posted by awl2005

The collection agency woman told me that I would have to pay this in full in 10 days or it would be turned over to an attorney and I would owe $5000.

That is a violation of the FDCPA. CAs cannot give a demand date that circumvents your 30 day right to dispute. I taught a class for my collectors at a previous employer on how to phrase demands so they didn't violate the FDCPA.

Originally Posted by awl2005

My question is: Can my balance jump to $5000 just by turning it over to a lawyer for collection?

Again it seems a little high -- but yes, legal fees can run the debt up fast.

Originally Posted by awl2005

I understand court costs and fees but isn't that excessive? My interest rate would actually be lower under a court order than what I am paying the credit card company, correct?

Not necessarily. Many courts order the agreement interest upto the day of the judgment, then the judgment interest takes over.

If you are waiting for the judgment for interest relief, you are making a serious mistake in your financial well-being. While the interest may be capped on that one debt, you will pay more on everything else from insurance to your other credit cards.

My advice is to call the CA back and ask to speak with a supervisor. Negotiate a payment plan.

DC

[chaz]

::::Quote:
Originally Posted by awl2005
The collection agency woman told me that I would have to pay this in full in 10 days or it would be turned over to an attorney and I would owe $5000.

That is a violation of the FDCPA. CAs cannot give a demand date that circumvents your 30 day right to dispute. I taught a class for my collectors at a previous employer on how to phrase demands so they didn't violate the FDCPA. ::::


I love reading threads about Debt Collectors who break the law. It's such a common thing with them.

[noonoo79]

Good catch Chaz! I am laughing all the way to my bank!