How to negotiate fair payment for collections

[erj145aviator]

Good Afternoon,

I completely overlooked a balance from a school I transferred out of.

They sent it to collections, but the collections agency is asking for more than I can literally handle each month given my income and they refused to take less.

Ideally I'd like to pay the school directly, but I'm still waiting for a phone call back from them. If they refuse to take payment from me and force me to go through the collections company - how can I approach them and say something along the lines of, "Hey listen up, according to US Code Section xyz, you have to do abc and this is all I can pay so you must be willing to compromise with me in reason...etc"

The guy also mentioned FAFSA. I need it to keep going to school, but this debt isn't related to a loan at all. It's simply an unpaid bill from my pocket to the school. Does this impact my ability to receive future Financial Aid?

I know these guys are all bark and will make up whatever they can to scare you into pawning your most sentimental possessions to pay a debt as quickly as possible...but at the same time I need to cover my bases.

I'd be willing to do a service trade for anyone in need of some web development!



Thanks in advance.

 

[mightymoose]

You no longer owe the money to the school and will actually cause problems if you try to pay the school... because the collection agency has purchased the debt and will continue to try to collect even if you pay the school.

The collection agency won't turn down any money that you send them. Pay what you can afford, or pay nothing and call their bluff. Unless they are willing to go to court and get a judgment then you won't have to pay them a thing.

This debt won't effect your ability to get financial aid at all.

How old is this debt? When is the last time you made a payment? If it is more than a few years old then it is possible that it is too late for anyone to collect at all.

Anyway- if money is really tight for you then you might be best off to pay nothing at all. Time is your friend. If the collection agency takes too long to act then the debt will become too old to collect on. If they do finally take action then you can negotiate a reasonable payment plan later when you are more able to pay. You better start putting some money aside though. You can only delay so long.

 

[erj145aviator]

Hi Thanks for the reply.

The total due is only a thousand, so I know they probably wont take me to court over it because that will cost them more than its worth.

I did get a hold of the school, but they put me off to another contact (school) there that wasn't in the office today. I'm not sure if they actually sold the debt or simply contracted them to collect. The total due was 800 some odd dollars, and now it is a little over 1,000 (collections fee im guessing).

I'm not terribly worried about my credit because I dont need it for another 4 years, but would like to keep it clean if possible. If I do send payments, regardless of how much - can they charge me interest or late payments?

(I never borrowed this money to begin with.)

 

[erj145aviator]

I forgot to add, the debt is about 3months old from the original statement from the school.

 

[erj145aviator]

Come to think of it. Is there a standard form that I can request that will have to truthfully outline such terms?


Thanks again!

 

[erj145aviator]

Update on Situation

The school did in fact say to pay through the collections company, but I asked her if the debt was sold or if they hired them to collect. She informed me that it was not sold, and the company is only hired to collect.

How can I verify that it is illegal for them to charge me late fees and/or interest?

This way I plan to send only what I can every 30 days, and they have no choice to accept it and cannot penalize me for not paying the amount they want. By they want, I mean a down payment and a monthly payment I cannot afford. I will pay whatever I can until the balance is paid off in full.

Thanks for the help!