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2 Bumps

Can a creditor refuse to make payment arrangements?

Can a creditor refuse to make payment arrangements if they've sold you out to a debt collector?

After DH's layoff we couldn't pay on our student loans and they turned it over to a debt collector. We kept trying to call the original creditor to work it out but they are refusing to work with us at all because it's already been turned over.

Can they do that? We are more than willing to pay down our debts including the normal interest and penalties, but we want to do it with the original creditor. The collector they gave it to has long been known to use excessive illegal tactics and we are not willing to tolerate threats, harassment and thousands upon thousands of dollars worth of extra debt in illegal fees and interest.

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Anonymous

Asked by Anonymous at 8:27 AM on Apr. 23, 2011 in Money & Work

Answers (5)
  • I'm pretty sure that yes, they've already sold it so it's no longer their concern. Have you considered using a credit counselling service to get that debt sorted? Getting through rough patches can be brutal but speaking from experience, getting through it yourself gives a real sense of accomplishment. Best of luck!
    Nonoluna

    Answer by Nonoluna at 8:30 AM on Apr. 23, 2011

  • Yes, they can do that, they sold your account to the collection agency, you have to deal with them, try to work out out with them, play nice, being nasty won't get you anywhere, they would much rather collect something than nothing. I understand how exasperating these collection agencies can be, I dealt with one when my 85 year old mom decided to sign a gym contract and then couldn't go, or pay, she signed a contract without understanding a word of English.

    older

    Answer by older at 8:31 AM on Apr. 23, 2011

  • They've sold it, it's not the original creditors problem now. The debt collector bought your debt, if that makes sense. You can make payment arrangements with the debt collector or sometimes they do it at a payoff or a reduced amount.
    The fees are LEGAL. They have the right to collect interest on it. There may be a limit to how much, but you would have to check the laws.
    Just be careful. If it is a credit card (at least I know a fact for credit cards) and you take a payoff or reduced amount...if they reduced your debt and you pay it off, if it's over $600 I think, they have to report it to the federal government and you get taxed for the money you didn't have to pay!
    BeachyBabe

    Answer by BeachyBabe at 8:34 AM on Apr. 23, 2011

  • From personal experience my answer is YES. Dealing with collection agencies can be frustrating so take a real deep breath before trying to deal with them. Older-your mother was 85 when she signed a gym contract and she didn't speak English..You would think she/you could have had several legitmate reasons why this borders on scam.

    meooma

    Answer by meooma at 8:39 AM on Apr. 23, 2011

  • meooma, yes, and they kept calling my house for years to try to collect, and they would get infuriated when I told them time and time again to sue her, I even said PLEASE sue her.........I also would not let them speak to her, and they would go ballistic on me!

    older

    Answer by older at 8:50 AM on Apr. 23, 2011

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