Orginal Debt More Than Doubled

[TheCurrys]

State: Illinois. Well, here's the story in short format. Both me and my spouse decided that we want a house. To take advantage of the many first time homebuyer programs, we must remove any open collections. Therefore, we paid off or settled most of our many debts that we acquired while still in school working part time. There are two debts left with two separate creditors that are nearly in the same position, the debts have more than doubled (within 1- 2 weeks) after our call to the collectors stating that we want to settle/ pay the accounts. We did not make them aware of our reasons and simply suggested that we realized that the debts are ours and need to be paid and we now have the means to pay in a lump sum payment a settlement amount for the debt. Both of the debts are near the 7 year mark without any activity (payments/ charges). My debt was originally $177 with a major department store. When I called the store, they referred me to a collection agency who then stated that my debt is $353. When I referred to the $177 the original debt amount that still appears on my credit report ($177 appeared on a credit report pulled a couple of days before my call), he stated that it is incorrect. After I refused to pay this ridiculous amount, the same day they changed the credit report to $353. Can they do this? My spouses debt was originally $250, he contacted a creditor who was requesting $562 and agreed to settle for $160 until my husband asked for it in writing. Two weeks later, the account was sold to another creditor who is now asking for $1098. Is this legal?

Can creditors just increase the balance owed by more than double and get away with it? What can we do or what laws can we threaten them with and maybe later pursue in court if they do not comply? Understanding that we could wait it out to the 7 year period, we want the house now and this is the only thing holding us back.


TheCurrys

 

[racer72]

Doncha just hate it when they tack on all that interest and late fees? The accounts were dormant till you called. Because of your offer to pay, the account is now active and subject to the interest and late fees that would have accrued over the time if the debt was not in default.

 

[FKNA]

Your best bet at this time is to contact these agencies telling them you dispute the debt. It's a commission driven business. Just a few minutes on the phone and you can get that amount down to not only what the original debt was, but you can even get them to settle for less than that.